Is The Timken Co. overvalued or undervalued?

As of 5 February 2024, The Timken Co. has moved from an attractive to a fair valuation grade. The company is currently fairly valued based on its financial metrics. The P/E ratio stands at 13, which is slightly below the peer average of approximately 12.92 for similar companies. Additionally, Timken's EV to EBITDA ratio is 8.54, which is also competitive compared to its peers, such as Pentair plc with an EV to EBITDA of 16.85 and Graco, Inc. at 20.02.
The return on capital employed (ROCE) is reported at 12.46%, and the return on equity (ROE) is 13.30%, indicating solid profitability. Despite these positive indicators, the stock has underperformed the S&P 500 over the past year, with a return of -13.05% compared to the index's 10.26%. Overall, while The Timken Co. shows reasonable valuation metrics, it is currently fairly valued in the market.