Is DT Midstream, Inc. overvalued or undervalued?

As of 26 February 2025, the valuation grade for DT Midstream, Inc. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently considered overvalued. Key ratios include a P/E ratio of 29, an EV to EBITDA of 18.98, and a Price to Book Value of 2.37, all of which suggest that the stock is trading at a premium compared to its earnings and asset value.
In comparison to its peers, DT Midstream, Inc. has a higher P/E ratio than the industry average of approximately 27.95, and its EV to EBITDA ratio also exceeds the peer average of 18.46. This overvaluation is further supported by the company's return on equity (ROE) of 8.16%, which is relatively low compared to the higher expectations set by its current stock price. While the company has outperformed the S&P 500 over the past year with a return of 52.65% compared to the index's 10.26%, this performance does not justify the current valuation levels.