On Thursday, Deutsche Bank set a higher price target for Crane Co. (NYSE:CR), a diversified manufacturer of engineered industrial products. The firm's analyst adjusted the target to $182.00, up from the previous $175.00, while reiterating a Buy rating on the stock.
The analyst anticipates Crane's third-quarter earnings per share (EPS) to be $1.32, a slight increase from the consensus estimate of $1.31. The projected earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter is $118 million, marginally surpassing the Street's forecast of $117 million.
The firm sees potential for Crane's EPS to reach $1.42 under an optimistic 'blue-sky scenario,' which would exceed the Street's expectations by approximately 8%. In such a scenario, the company's guidance could be adjusted upwards by 4%. The analyst expressed confidence in continued positive revisions and found the base case earnings growth algorithm to be compelling, citing a forward EPS compound annual growth rate (CAGR) of 17%.
Despite a more demanding valuation, Crane is trading at a level consistent with its peers, which include Emerson Electric Co. (NYSE:EMR), Honeywell International Inc. (NYSE:NASDAQ:HON), Parker-Hannifin Corp. (NYSE:NYSE:PH), Howmet Aerospace Inc. (NYSE:HWM (BMV:HWM)), and TransDigm Group Incorporated (NYSE:TDG). The analyst highlighted Crane's potential for significant capital deployment, forecasting the company to return to a negative net debt position by the fourth quarter.
The firm's outlook suggests that Crane's strategic financial management could support continued excess returns and offers positive prospects if the company can secure larger deals. The analyst concluded by maintaining a positive stance ahead of the company's upcoming earnings report.
In other recent news, industrial manufacturer Crane Company (NYSE:CR) has seen notable developments. The company reported strong Q2 growth during its earnings call, with a 9% core sales growth and an adjusted EPS of $1.30. In response to this positive performance, Crane has raised its full-year EPS guidance to $4.95 to $5.15, indicating an expected 18% growth at the midpoint. The company's Aerospace & Electronics and Process Flow Technologies segments also reported sales increases of 22% and 13% respectively.
In addition to its financial growth, Crane Company also announced the strategic addition of Susan D. Lynch to its Board of Directors. Lynch, who brings over 25 years of experience in financial roles and senior leadership positions, is expected to contribute significantly to Crane's growth strategy and shareholder value enhancement.
InvestingPro Insights
Recent data from InvestingPro reinforces Deutsche Bank's optimistic outlook on Crane Co. (NYSE:CR). The company's market capitalization stands at $8.96 billion, reflecting its significant presence in the industrial products sector. Crane's revenue for the last twelve months as of Q2 2024 was $2.21 billion, with a notable revenue growth of 11.07% over the same period.
InvestingPro Tips highlight Crane's financial strength and market performance. The company has maintained dividend payments for an impressive 54 consecutive years, demonstrating a commitment to shareholder returns. This aligns with Deutsche Bank's observation of Crane's potential for significant capital deployment. Additionally, Crane has shown a high return over the last year, with a one-year price total return of 82.99% as of the latest data.
The P/E ratio (adjusted) of 33.0 for the last twelve months as of Q2 2024 supports Deutsche Bank's assessment of a more demanding valuation. However, this should be considered in the context of Crane's strong financial performance and growth prospects.
For investors seeking a deeper analysis, InvestingPro offers 13 additional tips for Crane Co., providing a comprehensive view of the company's financial health and market position.
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