Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Kellanova, FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
An analysis of cash flow dynamics from 2019 to 2023 reveals a period of initial recovery followed by a significant divergence between operating cash generation and the cash available to equity holders.
- Net Cash Provided by Operating Activities
- Operating cash flows experienced a substantial increase between 2019 and 2020, rising from 1,176 million US$ to a peak of 1,986 million US$. Following this surge, a gradual and steady decline was observed through 2023, with the value settling at 1,645 million US$. Despite this slight downward drift, operating cash generation remained consistently higher than 2019 levels throughout the subsequent four years.
- Free Cash Flow to Equity (FCFE)
- The FCFE trend exhibited high volatility compared to operating cash flows. A negative position of -381 million US$ in 2019 transitioned into a growth phase, peaking at 884 million US$ in 2022. However, 2023 saw a sharp contraction, with FCFE falling to 246 million US$, representing a reduction of approximately 72% from the previous year's peak.
- Operating Cash Flow and FCFE Divergence
- A notable discrepancy between operating cash flows and FCFE is evident, particularly in 2023. While operating cash flows remained relatively stable between 2022 and 2023 (decreasing by only 6 million US$), FCFE dropped by 638 million US$. This divergence indicates that the reduction in cash available to equity holders was not driven by operational performance, but rather by significant increases in capital expenditures or substantial net repayments of debt during the 2023 fiscal period.
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Price to FCFE Ratio, Current
Kellanova, current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 342,287,795 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 246) |
| FCFE per share | 0.72 |
| Current share price (P) | 62.05 |
| Valuation Ratio | |
| P/FCFE | 86.34 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Coca-Cola Co. | 70.99 |
| Mondelēz International Inc. | 14.34 |
| PepsiCo Inc. | 14.69 |
| Philip Morris International Inc. | 24.00 |
| P/FCFE, Sector | |
| Food, Beverage & Tobacco | 25.95 |
| P/FCFE, Industry | |
| Consumer Staples | 34.94 |
Based on: 10-K (reporting date: 2023-12-30).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Kellanova, historical P/FCFE calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 340,678,265 | 341,830,292 | 341,674,873 | 343,950,311 | 342,054,365 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 246) | 884) | 842) | 783) | (381) | |
| FCFE per share3 | 0.72 | 2.59 | 2.46 | 2.28 | -1.11 | |
| Share price1, 4 | 56.13 | 68.91 | 66.12 | 59.26 | 64.50 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 77.73 | 26.65 | 26.83 | 26.03 | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Coca-Cola Co. | 22.42 | 29.91 | 23.29 | — | — | |
| Mondelēz International Inc. | — | 14.10 | 30.57 | — | — | |
| PepsiCo Inc. | 17.88 | 47.17 | 77.00 | — | — | |
| Philip Morris International Inc. | 11.93 | 6.64 | 20.46 | — | — | |
| P/FCFE, Sector | ||||||
| Food, Beverage & Tobacco | 20.54 | 16.95 | 29.54 | — | — | |
| P/FCFE, Industry | ||||||
| Consumer Staples | 24.17 | 25.27 | 24.83 | — | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 246,000,000 ÷ 340,678,265 = 0.72
4 Closing price as at the filing date of Kellanova Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 56.13 ÷ 0.72 = 77.73
6 Click competitor name to see calculations.
The valuation of the equity based on Free Cash Flow to Equity (FCFE) exhibited a period of stability followed by a sharp expansion in the most recent fiscal year. While the share price experienced moderate fluctuations, the underlying cash flow available to equity holders showed significant volatility, directly impacting the valuation multiples.
- Share Price Trends
- The share price moved from 64.50 US$ in 2019 to a peak of 68.91 US$ in 2022, before declining to 56.13 US$ by December 30, 2023. This represents a decrease of approximately 18.5% between the 2022 and 2023 year-end values.
- FCFE per Share Analysis
- FCFE per share transitioned from a negative value of -1.11 US$ in 2019 to a period of growth, reaching 2.59 US$ by 2022. However, a substantial contraction is observed in 2023, where FCFE per share fell to 0.72 US$, a decline of approximately 72% from the previous year's level.
- P/FCFE Ratio Interpretation
- Between 2020 and 2022, the P/FCFE ratio remained remarkably stable, hovering between 26.03 and 26.83. In 2023, the ratio surged to 77.73. Because the share price concurrently decreased, the spike in the ratio is attributed exclusively to the precipitous drop in FCFE per share. This suggests that the market valuation has become significantly stretched relative to the company's actual cash flow generation capacity in the most recent period.
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