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OMRON (TSE:6645) is in focus after announcing a collaboration with Dassault Systèmes that links virtual production design and simulation with real factory equipment, centered on a Virtual Twin of Production Systems.
See our latest analysis for OMRON.
The collaboration headlines arrive while momentum in OMRON’s share price has been building, with the latest close at ¥5,573 and a 30 day share price return of 25.74%. However, the 3 year total shareholder return of 27.38% and 5 year total shareholder return of 28.04% indicate a tougher longer term experience.
If this kind of robotics and automation theme interests you, it could be worth seeing what else is moving using our 34 robotics and automation stocks
So with OMRON’s share price up strongly in the past quarter, and recent revenue and net income growth also on show, is the current valuation still leaving room for mispricing, or is the market already banking on future growth?
Preferred P/E of 46.8x: Is it justified?
OMRON is currently on a P/E of 46.8x, which is high relative to both its own fair P/E estimate and the broader JP Electronic industry, while the last close price sits at ¥5,573.
P/E compares the share price with earnings per share and is often used for companies where profits are a key focus, such as industrial automation and electronics groups like OMRON. A higher P/E usually means the market is putting a richer price on each unit of earnings, often when it expects stronger or more resilient profit streams ahead.
Here, the current 46.8x P/E stands well above the estimated fair P/E of 26.9x. This suggests the market price is well ahead of where a regression based fair ratio model indicates it could settle. At the same time, the ratio is also much higher than the JP Electronic industry average of 16.3x, which places OMRON on a premium multiple compared to many domestic peers and implies expectations that are already demanding.
Explore the SWS fair ratio for OMRON
Result: Price-to-earnings of 46.8x (OVERVALUED)
However, there are still clear risks, including the 3- and 5-year negative total returns and OMRON’s P/E premium to the JP Electronic industry average.
Find out about the key risks to this OMRON narrative.
Another View: DCF Keeps Things In Balance
While the 46.8x P/E hints at a stretched price, the SWS DCF model paints a flatter picture, with OMRON at ¥5,573 versus an estimated future cash flow value of ¥5,566.72. That is almost a match. Is the real risk that expectations, rather than price, are doing the heavy lifting?
Look into how the SWS DCF model arrives at its fair value.
6645 Discounted Cash Flow as at May 2026
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out OMRON for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 17 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
Next Steps
With mixed signals on valuation and sentiment, this is a moment to look at the data yourself and decide how you feel about the balance of risk and reward. To see the full picture of both sides, review the 2 key rewards and 3 important warning signs
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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 6645.T.
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