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Crane's (CR) End-Market Strength a Saving Grace, Costs a Woe
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Crane Holdings Co. (CR - Free Report) is likely to gain from its presence in the diverse end markets, which allows it to counter risks associated with a single market. In the quarters ahead, strength in CR’s end markets, including general industrial, commercial and others are likely to benefit the stock. Also, CR’s efficient management team, efforts to develop products, investment in technology, improving order trends and a focus on commercial excellence are likely to drive its performance.
Divestment of non-core assets or businesses is advantageous for Crane. CR decided to divest its Crane Supply business in April 2022. The deal is in sync with CR’s strategy to restructure its business portfolio. The divestment is expected to enable CR to better focus on and efficiently direct resources to its Process Flow Technologies businesses. Also, CR’s decision to sell its Engineered Materials segment (announced in May 2021) will likely allow it to concentrate on its core businesses.
Crane focuses on rewarding its shareholders through dividend payments and share repurchases. In first-quarter 2022, CR used $26.7 million for paying out dividends and repurchased shares worth $175.8 million. In January 2022, the quarterly dividend rate was hiked 9%. It is worth noting that in April 2022, CR completed the previously announced share repurchase program worth $300 million.
However, cost woes and operating expense inflation pose a concern. Crane’s cost of sales increased 0.7% on a year-over-year basis in the first quarter, while selling, general and administrative expenses shot up 14.6% year over year in the first quarter of 2022. Inflationary pressures, supply-chain disturbances and pandemic impacts were a spoilsport in the quarter. These adversities are expected to persist in the near term too.
Crane operates across the Americas, the Middle East, Australia, Europe and Asia. So, the company remains vulnerable to foreign-currency and geopolitical issues. Crane expects forex woes to adversely impact sales by 1.5% in 2022.
Image Source: Zacks Investment Research
In the past six months, this currently Zacks Rank #3 (Hold) stock has dropped 14.3% compared with the industry’s decline of 18.8%.
In the past 60 days, Griffon’s earnings estimates have increased 40% for fiscal 2022 (ending September 2022). The stock has gained 10.5% in the past six months.
Carlisle Companies Incorporated (CSL - Free Report) presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 23%, on average.
In the past 60 days, Carlisle’s earnings estimates have increased 22.6% for 2022. CSL’s shares have gained 1.9% in the past six months.
Ferguson plc (FERG - Free Report) presently carries a Zacks Rank #2 (Buy). FERG delivered a trailing four-quarter earnings surprise of 14.2%, on average.
Earnings estimates of Ferguson have increased 1% for fiscal 2022 (ending July 2022) in the past 60 days. Its shares have declined 25.5% in the past six months.
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Crane's (CR) End-Market Strength a Saving Grace, Costs a Woe
Crane Holdings Co. (CR - Free Report) is likely to gain from its presence in the diverse end markets, which allows it to counter risks associated with a single market. In the quarters ahead, strength in CR’s end markets, including general industrial, commercial and others are likely to benefit the stock. Also, CR’s efficient management team, efforts to develop products, investment in technology, improving order trends and a focus on commercial excellence are likely to drive its performance.
Divestment of non-core assets or businesses is advantageous for Crane. CR decided to divest its Crane Supply business in April 2022. The deal is in sync with CR’s strategy to restructure its business portfolio. The divestment is expected to enable CR to better focus on and efficiently direct resources to its Process Flow Technologies businesses. Also, CR’s decision to sell its Engineered Materials segment (announced in May 2021) will likely allow it to concentrate on its core businesses.
Crane focuses on rewarding its shareholders through dividend payments and share repurchases. In first-quarter 2022, CR used $26.7 million for paying out dividends and repurchased shares worth $175.8 million. In January 2022, the quarterly dividend rate was hiked 9%. It is worth noting that in April 2022, CR completed the previously announced share repurchase program worth $300 million.
However, cost woes and operating expense inflation pose a concern. Crane’s cost of sales increased 0.7% on a year-over-year basis in the first quarter, while selling, general and administrative expenses shot up 14.6% year over year in the first quarter of 2022. Inflationary pressures, supply-chain disturbances and pandemic impacts were a spoilsport in the quarter. These adversities are expected to persist in the near term too.
Crane operates across the Americas, the Middle East, Australia, Europe and Asia. So, the company remains vulnerable to foreign-currency and geopolitical issues. Crane expects forex woes to adversely impact sales by 1.5% in 2022.
Image Source: Zacks Investment Research
In the past six months, this currently Zacks Rank #3 (Hold) stock has dropped 14.3% compared with the industry’s decline of 18.8%.
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Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank #1. GFF’s earnings surprise in the last four quarters was 97%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, Griffon’s earnings estimates have increased 40% for fiscal 2022 (ending September 2022). The stock has gained 10.5% in the past six months.
Carlisle Companies Incorporated (CSL - Free Report) presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 23%, on average.
In the past 60 days, Carlisle’s earnings estimates have increased 22.6% for 2022. CSL’s shares have gained 1.9% in the past six months.
Ferguson plc (FERG - Free Report) presently carries a Zacks Rank #2 (Buy). FERG delivered a trailing four-quarter earnings surprise of 14.2%, on average.
Earnings estimates of Ferguson have increased 1% for fiscal 2022 (ending July 2022) in the past 60 days. Its shares have declined 25.5% in the past six months.