Is GE Vernova T&D overvalued or undervalued?

As of 22 December 2023, the valuation grade for GE Vernova T&D has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued, with a PE ratio of 97.31, a Price to Book Value of 33.39, and an EV to EBITDA ratio of 71.77. These ratios suggest that the stock price is not justified by its earnings or book value when compared to industry peers.
In comparison, Larsen & Toubro, which is rated as attractive, has a PE ratio of 34.21 and an EV to EBITDA of 17.35, highlighting a stark contrast in valuation metrics. Siemens, another peer, is categorized as very expensive with a PE of 56.88 and an EV to EBITDA of 52.96. The notable outlier in the peer group is CG Power & Ind, which has a PE ratio of 107.03, further emphasizing the high valuation of GE Vernova T&D. Despite its strong recent stock performance, significantly outpacing the Sensex over various periods, the current valuation metrics suggest that investors should approach with caution.