Since October 2024, Crane has been in a holding pattern, posting a small loss of 1.1% while floating around $154.84.

Is now the time to buy Crane, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.

We're sitting this one out for now. Here are three reasons why there are better opportunities than CR and a stock we'd rather own.

Why Do We Think Crane Will Underperform?

Based in Connecticut, Crane (NYSE: CR) is a diversified manufacturer of engineered industrial products, including fluid handling, and aerospace technologies.

1. Slow Organic Growth Suggests Waning Demand In Core Business

We can better understand General Industrial Machinery companies by analyzing their organic revenue. This metric gives visibility into Crane’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Crane’s organic revenue averaged 6.9% year-on-year growth. This performance slightly lagged the sector and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Crane’s revenue to rise by 6.8%. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector.

3. EPS Trending Down

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Sadly for Crane, its EPS and revenue declined by 4.1% and 8.3% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Crane’s low margin of safety could leave its stock price susceptible to large downswings.

Final Judgment

We see the value of companies helping their customers, but in the case of Crane, we’re out. That said, the stock currently trades at 27.9× forward price-to-earnings (or $154.84 per share). At this valuation, there’s a lot of good news priced in - we think there are better opportunities elsewhere. Let us point you toward a top digital advertising platform riding the creator economy.

Stocks We Like More Than Crane

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