Is Rockwell Automation, Inc. overvalued or undervalued?

As of 13 February 2025, the valuation grade for Rockwell Automation, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company is currently assessed as overvalued based on its P/E ratio of 54, which is higher than peers such as Emerson Electric Co. at 51.42 and Keysight Technologies, Inc. at 43.37. Additionally, Rockwell's EV to EBITDA ratio stands at 36.46, further highlighting its premium valuation compared to the industry.
In terms of performance, Rockwell Automation has a return on equity (ROE) of 30.84% and a return on capital employed (ROCE) of 20.09%, which are strong indicators of profitability. However, when compared to KLA Corp., which has a higher P/E of 56.47 and a more attractive valuation grade, Rockwell's premium appears less justified. Despite a strong year-to-date return of 13.30% compared to the S&P 500's 2.44%, the overall valuation metrics suggest that Rockwell Automation, Inc. is currently overvalued.