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Crane (CR) Stock Up 30.8% YTD: What's Driving the Rally?
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Crane Co.’s (CR - Free Report) performance has been impressive since the beginning of this year, which is evident from a 30.8% increase in its share price. Strength across end markets, benefits from buyouts, solid cash flows and strong capital-allocation strategies supported positive market sentiments for the company.
The Stamford, CT-based company, with $6 billion of market capitalization, belongs to the Zacks Diversified Operations industry. The company currently carries a Zacks Rank #2 (Buy).
Year to date, Crane has outperformed its industry’s growth of 22.1% and the S&P 500’s rally of 21%.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Crane reported impressive results in both first and second quarters of 2021, wherein its earnings and sales surpassed the Zacks Consensus Estimate. The results were supported by improvement in demand for its products and solutions. It has been benefiting from improving order trends across several of its businesses, including short-cycle commercial and core process. The company anticipates witnessing strength across its businesses in chemical, general industrial, military, non-residential construction, municipal and most vertical end markets. For 2021, the company expects to generate overall sales of $3,100 million, higher than the previously stated $3,015 million.
The company is focused on strengthening its businesses through the addition of assets. Year to date, its acquired business of Instrumentation & Sampling boosted the Process Flow Technologies segment’s sales by 1% year over year. For 2021, it believes that acquisitions will boost its sales by $5 million.
Its ability to generate strong cash flows allows it to effectively deploy capital for paying out dividends apart from acquiring lucrative businesses. In the first half of 2021, the company generated strong free cash flow of $183.6 million. For 2021, it predicts free cash flow to be $320-$350 million. In the first half of 2021, it paid out dividends worth $50.2 million.
Crane’s focus on operational execution, along with its repositioning actions, has also been driving its performance, of late. In the first six months of 2021, it recorded a net restructuring gain of $13.3 million related to the repositioning actions it made.
The Zacks Consensus Estimate for Crane’s earnings is pegged at $6.13 for 2021, up 6.4% from the 30-day-ago figure. The consensus estimate for 2022 earnings stands at $7.27, having moved 3.4% north over the same time frame.
Other Key Picks
Some other top-ranked stocks from the same space are Raven Industries, Inc. , Carlisle Companies Incorporated (CSL - Free Report) and Danaher Corporation (DHR - Free Report) . While Raven currently sports a Zacks Rank #1 (Strong Buy), Carlisle and Danaher carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raven pulled off a positive earnings surprise of 42.59%, on average, in the trailing four quarters.
Carlisle pulled off a positive earnings surprise of 39.38%, on average, in the trailing four quarters.
Danaher pulled off a positive earnings surprise of 27.52%, on average, in the trailing four quarters.
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Crane (CR) Stock Up 30.8% YTD: What's Driving the Rally?
Crane Co.’s (CR - Free Report) performance has been impressive since the beginning of this year, which is evident from a 30.8% increase in its share price. Strength across end markets, benefits from buyouts, solid cash flows and strong capital-allocation strategies supported positive market sentiments for the company.
The Stamford, CT-based company, with $6 billion of market capitalization, belongs to the Zacks Diversified Operations industry. The company currently carries a Zacks Rank #2 (Buy).
Year to date, Crane has outperformed its industry’s growth of 22.1% and the S&P 500’s rally of 21%.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Crane reported impressive results in both first and second quarters of 2021, wherein its earnings and sales surpassed the Zacks Consensus Estimate. The results were supported by improvement in demand for its products and solutions. It has been benefiting from improving order trends across several of its businesses, including short-cycle commercial and core process. The company anticipates witnessing strength across its businesses in chemical, general industrial, military, non-residential construction, municipal and most vertical end markets. For 2021, the company expects to generate overall sales of $3,100 million, higher than the previously stated $3,015 million.
The company is focused on strengthening its businesses through the addition of assets. Year to date, its acquired business of Instrumentation & Sampling boosted the Process Flow Technologies segment’s sales by 1% year over year. For 2021, it believes that acquisitions will boost its sales by $5 million.
Its ability to generate strong cash flows allows it to effectively deploy capital for paying out dividends apart from acquiring lucrative businesses. In the first half of 2021, the company generated strong free cash flow of $183.6 million. For 2021, it predicts free cash flow to be $320-$350 million. In the first half of 2021, it paid out dividends worth $50.2 million.
Crane’s focus on operational execution, along with its repositioning actions, has also been driving its performance, of late. In the first six months of 2021, it recorded a net restructuring gain of $13.3 million related to the repositioning actions it made.
The Zacks Consensus Estimate for Crane’s earnings is pegged at $6.13 for 2021, up 6.4% from the 30-day-ago figure. The consensus estimate for 2022 earnings stands at $7.27, having moved 3.4% north over the same time frame.
Other Key Picks
Some other top-ranked stocks from the same space are Raven Industries, Inc. , Carlisle Companies Incorporated (CSL - Free Report) and Danaher Corporation (DHR - Free Report) . While Raven currently sports a Zacks Rank #1 (Strong Buy), Carlisle and Danaher carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raven pulled off a positive earnings surprise of 42.59%, on average, in the trailing four quarters.
Carlisle pulled off a positive earnings surprise of 39.38%, on average, in the trailing four quarters.
Danaher pulled off a positive earnings surprise of 27.52%, on average, in the trailing four quarters.