Crane Company Just Recorded A 28% EPS Beat: Here's What Analysts Are Forecasting Next

Crane Company (NYSE:CR) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.7% to hit US$514m. Crane also reported a statutory profit of US$1.08, which was an impressive 28% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Crane

After the latest results, the consensus from Crane's five analysts is for revenues of US$2.49b in 2023, which would reflect a concerning 26% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to crater 46% to US$3.72 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.28b and earnings per share (EPS) of US$3.61 in 2023. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$96.60, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Crane analyst has a price target of US$139 per share, while the most pessimistic values it at US$82.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 33% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 0.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.9% annually for the foreseeable future. It's pretty clear that Crane's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Crane following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Crane going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Crane has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

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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.