Briefing From The Editor -- IEP Stock

Icahn Enterprises logged a -8.4% change during today's morning session, and is now trading at a price of $36.98 per share.

Icahn Enterprises returned losses of -24.9% last year, with its stock price reaching a high of $55.55 and a low of $36.32. Over the same period, the stock underperformed the S&P 500 index by -21.0%. As of April 2023, the company's 50-day average price was $51.84. Icahn Enterprises L.P., through its subsidiaries, operates in investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. Based in Sunny Isles Beach, FL, the large-cap Industrials company has 20,041 full time employees. Icahn Enterprises has returned a 19.8% dividend yield over the last 12 months, but this may not be sustainable seen that the company has a choppy cash flow record.

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $10,386 $7,423 $10,941 $14,126
Revenue Growth n/a -28.53% 47.39% 29.11%
Gross Margins 20.9% 14.9% 13.3% 17.2%
Gross Margins Growth n/a -28.71% -10.74% 29.32%
Operating Margins 2.7% -7.8% -2.7% 4.3%
Operating Margins Growth n/a -388.89% 65.38% 259.26%
Net Margins -10.57% -22.27% -4.73% -1.3%
Net Margins Growth n/a -110.69% 78.76% 72.52%
Earnings Per Share -$5.38 -$7.33 -$2.32 -$0.46
EPS Growth n/a -36.25% 68.35% 80.17%
Diluted Shares (MM) 200 221 260 354
Free Cash Flow (MM) -$1,710 -$615 $16 $717
FCF Growth n/a 64.04% 102.6% 4381.25%
Capital Expenditures (MM) -$250 -$199 -$305 -$338
Net Debt / EBITDA nan nan 11.99 7.97

Icahn Enterprises does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $0.74, the company has a forward P/E ratio of 70.1. In comparison, the average P/E ratio for the Industrials sector is 20.49. On the other hand, the market is undervaluing Icahn Enterprises in terms of its equity because its P/B ratio is 2.8. In comparison, the sector average is 3.78. In conclusion, Icahn Enterprises's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.

Icahn Enterprises Is the Subject of Mixed Market Indicators:

Icahn Enterprises has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 89.7% of the company's shares, and the insider ownership rate stands at 0.16%, suggesting a small amount of insider investors. The largest shareholder is Icahn, Carl, C., whose 85% stake in the company is worth $11,094,032,160.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.