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Since Crane Co. (NYSE:CR) released its earnings in March 2019, analyst consensus outlook appear cautiously optimistic, as a 13% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 3.9%. By 2020, we can expect Crane’s bottom line to reach US$381m, a jump from the current trailing-twelve-month of US$336m. Below is a brief commentary on the longer term outlook the market has for Crane. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from Crane in the longer term?
Longer term expectations from the 7 analysts covering CR’s stock 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 reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 8.1% based on the most recent earnings level of US$336m to the final forecast of US$435m by 2022. EPS reaches $6.85 in the final year of forecast compared to the current $5.63 EPS today. With a current profit margin of 10%, this movement will result in a margin of 12% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Crane, there are three important aspects you should further research:
- 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.
- 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.
- 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 firstname.lastname@example.org. 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.