Is Trinseo Plc overvalued or undervalued?

As of 2 November 2022, Trinseo Plc's valuation grade moved from fair to risky, indicating a significant deterioration in its financial outlook. The company is currently considered overvalued. Key ratios reveal a Price to Book Value of -0.21, an EV to EBITDA of 14.30, and a Dividend Yield of 74.13%. These metrics highlight the company's struggles, particularly its negative return on capital employed (ROCE) of -1.69%.
In comparison to peers, Trinseo's valuation appears unfavorable; for instance, Proto Labs, Inc. has a P/E of 44.27 and an EV to EBITDA of 13.86, while Westlake Chemical Partners LP boasts a very attractive EV to EBITDA of 2.49. The stark contrast in these ratios reinforces the perception that Trinseo is not only underperforming relative to its peers but also carries a risky valuation profile. Recent stock performance shows Trinseo's return of -33.33% year-to-date, significantly lagging behind the S&P 500's 2.44%, further supporting the conclusion of its overvaluation.