Is Akzo Nobel overvalued or undervalued?

As of 17 February 2025, Akzo Nobel's valuation grade has moved from attractive to fair, indicating a shift in its market perception. The company is currently fairly valued, with a PE ratio of 34.42, an EV to EBITDA of 22.57, and a ROE of 32.29%. In comparison to its peers, Asian Paints is considered expensive with a PE of 54.97, while Kansai Nerolac is attractive with a PE of 31.09, suggesting that Akzo Nobel is positioned competitively within the industry.
Despite its fair valuation, Akzo Nobel has underperformed relative to the Sensex in the short term, with a year-to-date return of -8.47% compared to the Sensex's 5.66%. However, over the past year, it has achieved a return of 22.91%, which is significantly higher than the Sensex's 7.65%. This performance indicates potential resilience, but the current valuation suggests that investors should approach with caution.