Is W.W. Grainger, Inc. overvalued or undervalued?

As of 12 September 2025, the valuation grade for W.W. Grainger, Inc. has moved from fair to expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 58, a Price to Book Value of 33.39, and an EV to EBITDA of 40.91, all of which are significantly higher than its peers, such as Ferguson Plc, which has a P/E of 28.08 and an EV to EBITDA of 17.28, suggesting that Grainger's valuation is not justified by its earnings or asset base.
In comparison to the S&P 500, W.W. Grainger's stock has underperformed in the year-to-date and one-year periods, returning -4.63% and -0.78%, respectively, while the S&P 500 returned 12.22% and 17.14%. This underperformance reinforces the notion that the stock is overvalued given its high valuation ratios relative to its peers and the broader market.