Is Johnson Controls International Plc overvalued or undervalued?

As of 17 October 2025, the valuation grade for Johnson Controls International Plc has moved from fair to very expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 25, which is significantly lower than the peer average of approximately 31.07, and its EV to EBITDA ratio of 18.88, which also trails behind many peers in the industrial manufacturing sector. Additionally, the PEG ratio stands at 1.29, suggesting that the stock may not be justified at its current price given its growth prospects.
In comparison to its peers, GE Aerospace has a P/E ratio of 136.79, while Trane Technologies Plc shows a more reasonable P/E of 35.38, indicating that Johnson Controls is priced higher relative to its earnings potential. Despite the overvaluation, the company has performed well in recent periods, with a year-to-date return of 37.88% compared to the S&P 500's 13.30%, and a one-year return of 40.88% against the S&P 500's 14.08%. This strong performance may reflect investor optimism, but it does not mitigate the valuation concerns.