Is Parker-Hannifin Corp. overvalued or undervalued?

As of 14 February 2024, the valuation grade for Parker-Hannifin Corp. has moved from attractive to fair, indicating a shift in its perceived value. The company appears to be fairly valued at this time, with a P/E ratio of 35, an EV to EBITDA of 26.11, and a PEG ratio of 1.57. In comparison to peers, Trane Technologies Plc has a P/E of 35.38, while GE Aerospace is considered very expensive with a P/E of 136.79, highlighting the relative positioning of Parker-Hannifin within the industrial manufacturing sector.
Despite the recent downgrade in valuation, Parker-Hannifin has shown strong performance, with a one-year return of 24.08%, outperforming the S&P 500's return of 17.14% over the same period. This suggests that while the stock is currently fairly valued, it has delivered solid returns compared to broader market benchmarks.