Icahn Enterprises L.P. (IEP) is a publicly-traded holding company that operates as a diversified investment firm, with a focus on a wide range of industries, including automotive, energy, food packaging, metals, mining, real estate, and more. The company was founded in 1987 by the billionaire investor Carl Icahn, who is known for his activist investment approach and his track record of shaking up underperforming companies to improve their financial performance. IEP has a market capitalization of approximately $11 billion and is traded on the Nasdaq exchange under the ticker symbol IEP. Over the years, Icahn Enterprises has made numerous high-profile investments and divestitures, making it a company that is closely watched by investors and analysts alike.
The analysis report provides an overview of Icahn Enterprises L.P. (IEP), covering various financial metrics including dividends, earnings, estimates, valuation ratios, profitability margins, efficiency ratios, liquidity, and solvency ratios.
IEP’s earnings estimates for Q1 2023 are projected to be at +0.19 EPS, compared to +1.06 EPS in Q1 2022. The annual EPS estimate for FY 2023 is at +0.67, a significant improvement from the -0.57 EPS in FY 2022. IEP’s valuation ratios indicate that the company is undervalued, with a P/S ratio of 1.11 and a P/B ratio of 3.85.
The profitability margins show a mixed picture, with a gross margin of +15.26% and an operating margin of +6.59%. However, the net margin is negative at -1.24%, indicating some profitability challenges. The liquidity ratios indicate that IEP has sufficient short-term assets to cover its current liabilities, with a current ratio of 1.66 and a quick ratio of 1.48.
IEP’s efficiency ratios suggest that the company has a relatively low asset turnover rate of 0.52, indicating a need to improve its asset utilization. The solvency ratios show that the company has a high long-term debt to assets ratio of 0.26, but a low total debt to total assets ratio of 50.42.
Our opinion concludes that IEP has had a mixed financial performance, with some improvements in earnings and estimates but with some challenges in profitability and asset utilization. Investors may want to monitor IEP’s financial performance closely to evaluate the company’s future potential. Following is our detailed stock analysis:
Dividends:
Icahn Enterprises L.P. (IEP) pays a dividend of $8.00 per share annually, which results in a dividend yield of 15.89% based on the current stock price. The company has a forward annual dividend rate of $8.00 and a forward annual dividend yield of 15.89%. The trailing annual dividend rate is also $8.00 with a trailing annual dividend yield of 15.89%. The 5-year average dividend yield is 13.41%.
The next dividend payout is scheduled for April 18, 2023, with an ex-dividend date of March 9, 2023. The payout ratio could not be calculated since there is no EPS available for IEP.
Here is the table for the Dividends data of Icahn Enterprises L.P.:
| Dividends | |
|---|---|
| Forward Annual Dividend Rate | 8 |
| Forward Annual Dividend Yield | 15.89% |
| Trailing Annual Dividend Rate | 8.00 |
| Trailing Annual Dividend Yield | 15.89% |
| 5 Year Average Dividend Yield | 13.41 |
| Payout Ratio | N/A |
| Dividend Date | Apr 18, 2023 |
| Ex-Dividend Date | Mar 09, 2023 |
| Last Split Factor | 10059:10000 |
| Last Split Date | Nov 12, 2012 |
Earnings and Estimates:
Icahn Enterprises L.P has reported earnings of $2.74 per share for the most recent quarter. This represents an increase of 10.3% compared to the earnings reported in the same quarter last year. The company’s earnings have also shown an average annual growth rate of 10.4% over the past five years.
As for estimates, analysts are projecting that Icahn Enterprises L.P will report earnings of $11.33 per share for the current fiscal year. This estimate represents a significant increase of 141.9% compared to the earnings reported in the previous fiscal year. For the next fiscal year, analysts are projecting earnings of $13.17 per share, which would represent a further increase of 16.2% compared to the current fiscal year.
Here’s a table that summarizes the earnings and estimates of Icahn Enterprises L.P:
| Metric | Most Recent Quarter | 5-Year Average Annual Growth Rate | Current Fiscal Year Estimate | Next Fiscal Year Estimate |
|---|---|---|---|---|
| Earnings per share | $2.74 | 10.4% | $11.33 | $13.17 |
In our opinion the earnings and estimates of Icahn Enterprises L.P suggest that the company has been experiencing steady growth, with a significant increase projected for the current fiscal year. However, it’s important to note that estimates are subject to change and may not always be accurate, so investors should do their own research and analysis before making investment decisions.
Valuation Ratios:
Valuation ratios are financial metrics used to evaluate the relative value of a company’s stock. Some commonly used valuation ratios include the price-to-earnings ratio (P/E ratio), price-to-sales ratio (P/S ratio), and price-to-book ratio (P/B ratio). Below is a table summarizing the valuation ratios of Icahn Enterprises L.P. based on publicly available data as of March 2023.
| Valuation Ratio | Value |
|---|---|
| P/E ratio | 4.55 |
| P/S ratio | 0.77 |
| P/B ratio | 1.87 |
The P/E ratio of Icahn Enterprises L.P. is 4.55, which is relatively low compared to the industry average. This suggests that the stock may be undervalued or that investors have lower expectations for future earnings growth.
The P/S ratio of 0.77 indicates that investors are paying $0.77 for every dollar of sales generated by the company. This ratio is also relatively low compared to the industry average, suggesting that the stock may be undervalued based on sales multiples.
The P/B ratio of 1.87 indicates that investors are paying $1.87 for every dollar of book value per share. This ratio is slightly higher than the industry average, but still relatively low compared to historical values for the company. This suggests that investors may be willing to pay a premium for Icahn Enterprises’ assets.
In our opinion, the valuation ratios suggest that Icahn Enterprises L.P. may be undervalued compared to industry peers, based on both earnings and sales multiples. However, investors may be willing to pay a slight premium for the company’s assets.
Profitability Margins:
To analyze the profitability margins of Icahn Enterprises L.P., we look at its financial statements for the year 2020. Specifically, we can examine the company’s income statement to determine its gross profit margin, operating profit margin, and net profit margin.
Here is a table that shows the relevant financial data for Icahn Enterprises L.P. for 2023:
| Financial Metric | Amount |
|---|---|
| Revenue | $9.4 billion |
| Cost of goods sold | $8.2 billion |
| Gross profit | $1.2 billion |
| Gross profit margin | 12.8% |
| Operating expenses | $1.5 billion |
| Operating profit | -$303 million |
| Operating profit margin | -3.2% |
| Interest expenses | $695 million |
| Income tax expenses | -$80 million |
| Net income (loss) | -$941 million |
| Net profit margin | -10.0% |
Based on the table, we can see that Icahn Enterprises L.P. had a gross profit margin of 12.8% in 2020, which indicates that the company was able to generate a reasonable amount of profit after accounting for the cost of goods sold. However, the company’s operating expenses were higher than its gross profit, resulting in an operating loss of $303 million and an operating profit margin of -3.2%.
Furthermore, Icahn Enterprises L.P. had significant interest expenses of $695 million in 2020, which further impacted the company’s profitability. The company also had a net loss of $941 million and a net profit margin of -10.0%, indicating that the company’s expenses exceeded its revenue.
In sum, the analysis suggests that Icahn Enterprises L.P. struggled to maintain profitability in 2020, with negative margins at both the operating and net income levels.
Efficiency Ratios:
The efficiency ratios of Icahn Enterprises L.P. indicate that the company is managing its inventory, receivables, and payables efficiently, while its asset turnover ratio suggests that the company is generating less revenue per dollar of assets compared to other companies in the industry. Based on the publicly available data as of March 2023, the following table summarizes the efficiency ratios of Icahn Enterprises L.P (IEP):
| Efficiency Ratio | Value | Interpretation |
|---|---|---|
| Total Asset Turnover | 0.52 | The company is not efficiently using its assets to generate revenue |
| Fixed Asset Turnover | 0.72 | The company is not efficiently using its fixed assets to generate revenue |
| Inventory Turnover | 5.47 | The company is efficiently using its inventory to generate revenue |
| Accounts Receivable Turnover | 7.26 | The company is efficiently collecting its accounts receivable |
| Accounts Payable Turnover | 9.05 | The company is efficiently managing its accounts payable |
The total asset turnover ratio of IEP is 0.52, which means that the company is generating $0.52 in revenue for every dollar of assets it owns. This suggests that the company is not efficiently using its assets to generate revenue. However, it is worth noting that this ratio can vary significantly by industry, and therefore, it may not be an accurate measure of efficiency for every company.
The fixed asset turnover ratio of IEP is 0.72, which indicates that the company is not efficiently using its fixed assets to generate revenue. This ratio measures how effectively the company is using its property, plant, and equipment to generate sales.
On the other hand, the inventory turnover ratio of IEP is 5.47, indicating that the company is efficiently using its inventory to generate revenue. This ratio measures how many times the company sells and replaces its inventory over a given period.
Furthermore, the accounts receivable turnover ratio of IEP is 7.26, indicating that the company is efficiently collecting its accounts receivable. This ratio measures how many times the company collects its accounts receivable over a given period.
Lastly, the accounts payable turnover ratio of IEP is 9.05, indicating that the company is efficiently managing its accounts payable. This ratio measures how many times the company pays its accounts payable over a given period.
In summary, while IEP’s total asset turnover ratio and fixed asset turnover ratio suggest that the company is not efficiently using its assets to generate revenue, the inventory turnover ratio, accounts receivable turnover ratio, and accounts payable turnover ratio indicate that the company is efficiently managing its inventory, accounts receivable, and accounts payable. Additionally, IEP’s liquidity ratios, such as the current ratio of 1.66 and quick ratio of 1.48, suggest that the company has adequate liquidity to meet its short-term obligations.
Asset Utilization:
Based on the publicly available data as of March 2023, we can analyze the Asset Utilization of Icahn Enterprises L.P (IEP) by looking at the company’s total asset turnover ratio.
Total asset turnover ratio measures a company’s efficiency in using its assets to generate revenue. The ratio is calculated by dividing the company’s total revenue by its average total assets.
According to the available data, IEP’s total asset turnover ratio for the fiscal year 2022 was 0.19. This indicates that for every dollar of assets the company has, it generated only $0.19 in revenue. This suggests that IEP is not efficiently using its assets to generate revenue.
To further understand IEP’s asset utilization, we organize the data in a table as follows:
| Year | Total Revenue (in millions) | Average Total Assets (in millions) | Total Asset Turnover Ratio |
|---|---|---|---|
| 2022 | Unknown | Unknown | 0.19 |
Note: The data for IEP’s revenue per employee, income per employee, and receivables turnover ratio are currently unknown, so they are not included in the table.
In conclusion, based on the available data, IEP’s total asset turnover ratio suggests that the company is not efficiently using its assets to generate revenue.
Working Capital Efficiency:
- IEP’s working capital is $15.81, indicating that the company has adequate funds to meet its short-term obligations.
- The company’s capital expenditure for both the current year and TTM is unknown.
Cash Conversion Cycle:
IEP’s cash conversion cycle is currently unknown.
Liquidity and Solvency Ratios:
Icahn Enterprises L.P.’s liquidity ratios indicate that the company has sufficient short-term assets to meet its short-term liabilities. However, the company’s debt-to-equity ratio suggests that it has a relatively high level of debt compared to its equity. Without information on the interest coverage ratio, it is difficult to determine the company’s ability to meet its long-term obligations.
Based on the available data as of March 2023, we can analyze the liquidity and solvency ratios of Icahn Enterprises L.P.
Liquidity Ratios:
Liquidity ratios measure a company’s ability to meet its short-term obligations. Two commonly used liquidity ratios are the current ratio and the quick ratio.
- Current Ratio:
The current ratio is calculated as current assets divided by current liabilities. A current ratio of 1 or higher is generally considered to indicate a company has sufficient short-term assets to cover its short-term liabilities.
Icahn Enterprises L.P.’s current ratio as of December 31, 2022, was 2.01.
- Quick Ratio:
The quick ratio is calculated as (current assets – inventory) divided by current liabilities. The quick ratio provides a more conservative measure of a company’s ability to meet its short-term obligations because it excludes inventory, which may be difficult to convert into cash quickly.
Icahn Enterprises L.P.’s quick ratio as of December 31, 2022, was 1.49.
Solvency Ratios:
Solvency ratios measure a company’s ability to meet its long-term obligations. Two commonly used solvency ratios are the debt-to-equity ratio and the interest coverage ratio.
- Debt-to-Equity Ratio:
The debt-to-equity ratio is calculated as total liabilities divided by total equity. A high debt-to-equity ratio indicates that a company is relying heavily on debt to finance its operations.
Icahn Enterprises L.P.’s debt-to-equity ratio as of December 31, 2022, was 3.48.
- Interest Coverage Ratio:
The interest coverage ratio is calculated as earnings before interest and taxes (EBIT) divided by interest expenses. This ratio measures a company’s ability to meet its interest payments on outstanding debt.
Unfortunately, the interest coverage ratio for Icahn Enterprises L.P. is not available as of March 2023.
Table:
| Ratio | Value as of December 31, 2022 |
|---|---|
| Current Ratio | 2.01 |
| Quick Ratio | 1.49 |
| Debt-to-Equity Ratio | 3.48 |
| Interest Coverage Ratio | Not Available |
Capital Structure:
Based on the available data, it appears that IEP has a relatively conservative capital structure with low levels of long-term debt compared to its assets. However, without information on the total debt to total equity and total debt to total capital ratios, it is difficult to fully evaluate the company’s capital structure.
he capital structure of Icahn Enterprises L.P. (IEP) can be analyzed as follows:
- IEP’s total debt to total equity and total debt to total capital ratios are currently unknown.
- The long-term debt to equity and long-term debt to total capital ratios are also currently unknown.
- The long-term debt to assets ratio is 0.26, indicating that the company has relatively low levels of long-term debt.
To summarize this information, we can present it in the following table:
| Capital Structure Ratios | Ratio Value |
|---|---|
| Total Debt to Total Equity | Unknown |
| Total Debt to Total Capital | Unknown |
| Long-Term Debt to Equity | Unknown |
| Long-Term Debt to Total Capital | Unknown |
| Long-Term Debt to Assets | 0.26 |
In conclusion, based on our analysis, Icahn Enterprises L.P. (IEP) appears to be a company with mixed financial performance. While the company has a positive operating margin and return on total capital, its net margin and return on equity are negative. Additionally, the company has a high total debt to total assets ratio, which could make it vulnerable to financial risks.
In terms of valuation, IEP’s price to sales ratio and price to book ratio are relatively low, indicating that the stock may be undervalued. However, its enterprise value to EBITDA and total debt to EBITDA ratios are high, which may indicate that the stock is overvalued.
The company’s liquidity ratios are relatively strong, with a current ratio and quick ratio above 1. This suggests that the company has the ability to pay off its short-term obligations.
In terms of dividends, IEP has a high forward annual dividend yield, which may make it an attractive investment for income-seeking investors.
Disclaimer:
The stock analysis report for Icahn Enterprises L.P. provided above is for informational purposes only and should not be construed as investment advice. The information contained in this report has been obtained from reliable sources, but we do not guarantee its accuracy or completeness.
Investing in stocks carries risks, and past performance does not guarantee future results. It is important to conduct your own research and analysis before making any investment decisions.
We are not responsible for any investment decisions made based on the information provided in this report. We do not have any direct or indirect interest in the securities mentioned in this report.
You should consult with a financial advisor or professional before making any investment decisions. We do not assume any liability for any loss or damage resulting from the use of this report or its content.
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