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We issued an updated research report on Crane Co. (CR - Free Report) on Jun 7, 2016. The company is engaged in the manufacturing and selling of engineered industrial products in countries like North and South America, Europe, the Middle East, Asia and Australia.
Growth Drivers
One of the most striking features of Crane is its diversified product portfolio that caters to the needs of a vast customer base in the various markets, including aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and others. Backed by the benefits of such diversities, the company anticipates long-term organic growth to be at least 2−4% for Fluid Handling, 3−5% for Payment & Merchandising Technologies, 4−5% for Aerospace & Electronics, and equal to Gross Domestic Product growth for Engineered Materials.
Also, Crane is consistently making efforts to improve and expand its business through organic and inorganic means. In this regard, the 2013-acquistion of MEI assets, now a part of Payment & Merchandising Technologies segment, is worth mentioning.
By the end of 2016, Crane aims to realize cumulative synergistic benefits of $33 million from this acquisition. Moreover, the company is committed toward rewarding its shareholders handsomely through dividend payments and share buybacks. Over the long term, the company targets to achieve a total payout ratio of 40−50%.
Major Risks
Notwithstanding such long-term positives, Crane is exposed to risks arising from adverse foreign currency movements, stiff competition and uncertain global economic conditions. Such headwinds might prove detrimental to the company’s profitability in the near term.
For 2016, Crane predicts earnings per share to be flat to down 7% and core sales to be down 1.5% to up 1.5% year over year. Adverse foreign currency movements will likely hurt the top line by 2%. Also, difficulties or delays in research and development or production and services, apart from failure of new products and technologies in the market, may damage the company’s competitive position.
Crane Co. currently has a $3.5 billion market capitalization. We believe the above-mentioned pros and cons justifies the company’s Zacks Rank #3 (Hold). The company faces competition from others players in the sector including Koninklijke KPN N.V. (KKPNF - Free Report) , Carlisle Companies Incorporated (CSL - Free Report) and 3M Company (MMM - Free Report) .
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Crane's Long-Term Prospects Solid, Runs Near-Term Risks
We issued an updated research report on Crane Co. (CR - Free Report) on Jun 7, 2016. The company is engaged in the manufacturing and selling of engineered industrial products in countries like North and South America, Europe, the Middle East, Asia and Australia.
Growth Drivers
One of the most striking features of Crane is its diversified product portfolio that caters to the needs of a vast customer base in the various markets, including aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and others. Backed by the benefits of such diversities, the company anticipates long-term organic growth to be at least 2−4% for Fluid Handling, 3−5% for Payment & Merchandising Technologies, 4−5% for Aerospace & Electronics, and equal to Gross Domestic Product growth for Engineered Materials.
Also, Crane is consistently making efforts to improve and expand its business through organic and inorganic means. In this regard, the 2013-acquistion of MEI assets, now a part of Payment & Merchandising Technologies segment, is worth mentioning.
By the end of 2016, Crane aims to realize cumulative synergistic benefits of $33 million from this acquisition. Moreover, the company is committed toward rewarding its shareholders handsomely through dividend payments and share buybacks. Over the long term, the company targets to achieve a total payout ratio of 40−50%.
Major Risks
Notwithstanding such long-term positives, Crane is exposed to risks arising from adverse foreign currency movements, stiff competition and uncertain global economic conditions. Such headwinds might prove detrimental to the company’s profitability in the near term.
For 2016, Crane predicts earnings per share to be flat to down 7% and core sales to be down 1.5% to up 1.5% year over year. Adverse foreign currency movements will likely hurt the top line by 2%. Also, difficulties or delays in research and development or production and services, apart from failure of new products and technologies in the market, may damage the company’s competitive position.
Crane Co. currently has a $3.5 billion market capitalization. We believe the above-mentioned pros and cons justifies the company’s Zacks Rank #3 (Hold). The company faces competition from others players in the sector including Koninklijke KPN N.V. (KKPNF - Free Report) , Carlisle Companies Incorporated (CSL - Free Report) and 3M Company (MMM - Free Report) .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>