Crane Co. (NYSE:CR): Is It A Smart Long Term Opportunity?

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Since Crane Co. (NYSE:CR) released its earnings in March 2019, analysts seem fairly confident, with profits predicted to increase by 13% next year against the past 5-year average growth rate of 3.9%. Presently, with latest-twelve-month earnings at US$336m, we should see this growing to US$381m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Crane

How will Crane perform in the near future?

The longer term view from the 7 analysts covering CR is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CR’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NYSE:CR Past and Future Earnings, June 26th 2019
NYSE:CR Past and Future Earnings, June 26th 2019

From the current net income level of US$336m and the final forecast of US$435m by 2022, the annual rate of growth for CR’s earnings is 8.1%. This leads to an EPS of $6.85 in the final year of projections relative to the current EPS of $5.63. In 2022, CR’s profit margin will have expanded from 10% to 12%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Crane, there are three pertinent aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Crane worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Crane is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Crane? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.