Author: admin

What counts as a “normal” P/E depends on what investors expect for future growth and how much risk they see in those earnings. Higher expected growth and lower perceived risk usually support a higher P/E, while lower growth or higher risk tend to mean a lower P/E.

Hitachi is currently trading on a P/E of 29.52x. That sits above the Industrials sector average of 12.98x and also above the peer group average of 13.32x. To add more context, Simply Wall St calculates a proprietary “Fair Ratio” for Hitachi of 36.10x, which reflects factors such as earnings growth, industry, profit margins, market cap and risk profile.

This Fair Ratio aims to be more tailored than a simple comparison with peers or the sector, because it adjusts for company specific traits rather than assuming all firms should trade on the same multiple. Compared with this Fair Ratio, Hitachi’s current P/E of 29.52x is lower, which points to the shares being undervalued on this measure.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you turn your view of Hitachi into a clear story that links its business drivers to a forecast for revenue, earnings and margins, then to a Fair Value you can compare with the current price. All of this is updated as new news or earnings arrive. One investor might back a higher fair value around ¥5,300 if they think government backed energy and AI infrastructure and digital services can support stronger margins, while another might anchor closer to ¥3,900 if they are more cautious about competition, costs and underperforming segments.

Do you think there’s more to the story for Hitachi? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include 6501.T.

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