Is TE Connectivity Plc overvalued or undervalued?

As of 22 January 2025, the valuation grade for TE Connectivity Plc has moved from fair to expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 40.30, which is significantly higher than the industry average, suggesting that investors are paying a premium for its earnings. Additionally, the EV to EBITDA ratio stands at 16.88, further supporting the notion of overvaluation, as it reflects a high valuation relative to earnings before interest, taxes, depreciation, and amortization.
In comparison to peers, TE Connectivity Plc's valuation appears less favorable; for instance, its P/E ratio is notably higher than that of its competitors, which typically have lower ratios. The company's recent performance has outpaced the S&P 500, with a year-to-date return of 52.00% compared to the index's 12.22%, and a one-year return of 48.92% versus 17.14%. However, despite these strong returns, the elevated valuation ratios suggest that the stock may not be a prudent investment at current levels.