CRANE COMPANY (CR): what the price assumes

In the published model solve dated 2026-Q2, anchored at $207.00, CRANE COMPANY (CR) is priced for today's economics sustained for ~6.8 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/CR

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.

Per-Model Detail (n=12)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Valves and related process products are the largest single revenue line at 41%, with the aerospace and defense lines together supplying most of the rest, so this is an industrial parts maker with a flight-hours business attached rather than the reverse.
• The price is the risk: at roughly 33 times company-wide operating income it embeds today's economics persisting for about 8.5 years, a run only about 18% of comparable fast growers have managed.
• Growth is being purchased as well as earned, with the Druck, Panametrics, Reuter-Stokes and optek-Danulat acquisitions named as the drivers of expected 2026 segment profit improvement and $1.2 billion held in escrow for that purchase.

Bull Case

The bear's sentence is easy to write and hard to answer: you are paying about 33 times operating profit for a company that makes valves, pumps and aircraft components, in an industry where the average business earns a fraction of that multiple. Start there, because if that objection holds, nothing else matters.

Test it against what the business actually converts. Crane turns about 17.5% of revenue into operating profit. Across its process flow comparisons that puts it ahead of FLS at 8.3% and XYL at 13.6%, level with ITT at 15.9% and DOV at 16.7%, and behind IEX at 20.7% and GGG at 27.5%. In aerospace the spread is wider still, with DRS at 9.9% at one end and TDG at 46.5% at the other. A mid-pack margin does not on its own justify a top-half multiple. So the multiple must be resting on something other than today's margin, and the interesting question is what.

The answer management gives is mix and execution, and it is specific rather than aspirational. For the process business it expects "an improvement in operating profit driven primarily by productivity benefits and operating leverage on higher volumes, lower transaction related expenses, higher pricing net of inflation and contributions from the Druck, Panametrics, Reuter-Stokes, and optek-Danulat acquisitions". Every item on that list is a lever the company pulls itself rather than one the cycle hands it. Pricing net of inflation in particular is the tell of a product that is specified into a customer's process and not easily swapped out.

The aerospace side is where the mix genuinely shifts. In the March 2026 quarter, "Sales of Military Aftermarket Products increased $6.4 million, or 28.2%, to $29.1 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally". Aftermarket parts are the annuity inside an aerospace business: the original equipment sale is a long qualification battle fought once, and the replacement parts that follow it run for the life of the platform. Commercial aftermarket demand, as the company puts it, is "closely tied to total aircraft flight hours", which is a demand driver that recovers with traffic rather than with capital spending budgets.

The portfolio has been actively pruned to fund that. Effective January 1, 2025 the company completed the sale of its Engineered Materials segment for approximately $208.0 million on a cash-free and debt-free basis, having entered the agreement in order "to focus growth investments on our two remaining segments". Selling a business to buy instrumentation companies is a legible strategy: it trades a commodity position for one where the product is measured in accuracy rather than tons.

The balance sheet gives management room to keep doing it. Operating profit covers the interest bill about 15.9 times over, and the company reported compliance with all its debt covenants at the end of 2025. Since the separation in 2023 it has raised guidance on 9 separate occasions and reaffirmed it once, which is a short record but a consistent one. The concession is that the multiple leaves nothing for a stumble: at this price, a company that merely performs well is not performing well enough.

Bear Case

Strip away the multiple for a moment and describe what this company sells. Valves and related products for chemical and industrial processes. Pumps. Instrumentation. Components and spare parts that go into aircraft and defence platforms. These are good businesses, generally protected by qualification requirements and switching costs, and they are also businesses that have existed in roughly their current form for a very long time. Nothing about them is being reinvented. The market is nevertheless pricing this one as though its economics will improve and then hold, without fading, for the better part of a decade.

That is not a figure of speech. At roughly 33 times company-wide operating income, the price embeds today's economics persisting for about 8.5 years at a growth rate near the ceiling of what the business can fund from its own cash flow. Among comparable fast growers, only about 18% have sustained that pace for that long. The distribution of outcomes is knowable here, and most of it sits below what is being paid for.

The valuation methods split about as starkly as they can. Only the forward-growth approach reaches the current price. The peer-multiple methods land at roughly a third of it, the asset-based methods around a third as well, and the no-growth earnings-power methods further below still, with the price sitting more than five times where that family reaches. When one family reaches the price and every other family sits far under, the buyer is not paying for the business as it is measured today. They are paying for a compounding path.

The composition of the growth deserves attention too, because a good deal of it is being bought. The Druck, Panametrics, Reuter-Stokes and optek-Danulat acquisitions are named repeatedly as the source of expected segment profit improvement in 2026, and at the start of the most recent period the company held "$ 1.2 billion in funds held in an escrow account related to the acquisition of Druck, Panametrics, and" related businesses. Acquired growth is real growth, but it is not the same thing as organic compounding, and it consumes capital at prices set by competitive auctions rather than by the buyer.

Underneath the story sit two ordinary cycles. The process side is exposed to industrial end markets, and the company expects core sales "driven by demand in the pharmaceutical, water and waste-water and cryogenic markets offset by ongoing sluggishness in the chemical markets". The aerospace side is exposed to air travel, with the company warning that "a significant decline in demand for air travel, or a decline in airline profitability generally, could result in reduced" demand for its products. Even in the recent quarter the commercial aftermarket line was expected lower in 2026 on reduced initial provisioning and spares replenishment. Two cyclical businesses in a portfolio do not cancel out; they simply arrive at different times.

The balance sheet is not the problem, and it would be dishonest to pretend otherwise: interest is covered about 15.9 times over. The problem is arithmetic of a different kind. A price built on eight and a half years of uninterrupted execution has no room in it for either of those cycles turning down at an inconvenient moment, and industrial cycles have never once given notice.

Valuation

Only one family of valuation method reaches this price, and it is the one that projects cash flows forward. The peer-multiple methods land near a third of the current level, the book-value-and-returns methods land in similar territory, and the no-growth earnings-power methods sit furthest below, with the price at more than five times where that family reaches. That configuration has a specific meaning: the static frames, which price a business on what it owns and what it currently earns, structurally cannot capture a durability premium, and the market is paying one.

The size of that premium is measurable. At roughly 33 times company-wide operating income, the price implies today's economics continuing for about 8.5 years at a rate near the maximum the business could fund from its own cash generation. That is the bet, stated as plainly as it can be stated. The historical record for such runs is the useful context: only about 18% of comparable fast growers sustained that pace for that duration, and the multiple sits in the upper half of the range this company's peers trade at. Treat the horizon as approximate, since each percentage point of change in the assumed cost of capital moves it by close to two years.

The one forward method that produces a value reaches the price by holding the sales multiple flat at today's level and running the recent growth rate forward with a taper. That is a defensible convention rather than an aggressive one, and it is worth being clear about what it does and does not assume: it does not assume the multiple expands, only that the market keeps paying what it pays now for each dollar of sales several years out.

The peer numbers give the durability question its texture. On revenue of about $2.44B the company converts 17.5% into operating profit. Within process flow that lands between ITT at 15.9% and IEX at 20.7%, above XYL at 13.6% and FLS at 8.3%, and below GGG at 27.5%. On the aerospace side HEI runs 23.5% and TDG 46.5%, both well ahead. Growth rates cluster differently again, with ITT at 16.6% and WTS at 14.2% revenue growth against DOV at 7.1% and GGG at 4.6%. Nothing in that spread marks this company out as the structural winner the multiple implies; it marks it out as a solid operator in two decent industries.

Where the balance sheet enters the argument it does so as a permission rather than a constraint. Operating profit covers the interest bill about 15.9 times over, the company reported compliance with all debt covenants at December 31, 2025, and it held open standby letters of credit of $37.0 million at that date. That capacity is what funds the acquisition program the growth case depends on, and it is also the reason the downside here is about the multiple rather than about survival. The 41% of revenue coming from process valves and related products keeps generating cash whatever the market decides those cash flows are worth.

Catalysts

Defence demand is the clearest recent mover. In the quarter ended March 31, 2026, "Sales of Military Aftermarket Products increased $6.4 million, or 28.2%, to $29.1 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally". Management expects that to continue, citing improvement in commercial original equipment "driven by higher aircraft build rates, and increased demand for our military OEM and aftermarket business driven by continued global geopolitical uncertainty". Running the other way in the same period, commercial aftermarket sales were expected lower in 2026 on reduced initial provisioning and commercial spares replenishment, so the aerospace segment is currently being carried by its defence half.

Acquisitions are the other live thread and they are already funded. At the start of the most recent period the company held "$ 1.2 billion in funds held in an escrow account related to the acquisition of Druck, Panametrics, and" related businesses, and the same names are cited as the primary source of expected segment operating profit improvement in 2026 alongside productivity and pricing. The integration of those businesses, rather than any single order, is what will show up in next year's margin line.

On the disposal side the reshaping is complete. Effective January 1, 2025 the company finished selling its Engineered Materials segment for approximately $208.0 million on a cash-free and debt-free basis, with a further $7.8 million received during the second quarter of 2025. For the process business, the stated 2026 outlook is demand in "the pharmaceutical, water and waste-water and cryogenic markets offset by ongoing sluggishness in the chemical markets". Chemical demand turning is the swing factor there, and it is the one item on the list that nobody at the company controls.

Peer Cohorts (Per Segment, With Filing Citations)

Aerospace & Advanced Technologies (reported)

• HEI (HEICO CORPORATION)
• FY2025 10-K: …misappropriation or obsolescence from occurring by developing new techniques and improving existing methods and processes, which we will continue on an ongoing basis as dictated by the technological needs of our business. We believe that, based on our competitive pricing, reputation for high quality, short lead time…
• FY2025 10-K: …and business aircraft, aircraft engines and related components and equipment. Due in large part to our established industry presence, we enjoy strong customer relations, name recognition and repeat business. We sell our products to a broad customer base consisting of domestic and foreign commercial and cargo…
• TDG (TransDigm Group Incorporated)
• FY2025 10-K: …in the generation, amplification, transmission and reception of microwave signals, and single and two-stage servo values. Primary customers of this segment are engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots. Products are sold in…
• FY2025 10-K: …handling, delivery systems and electronic components used in the generation, amplification, transmission and reception of microwave signals. Primary customers of this segment are engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies and repair depots.…
• CW (CURTISS-WRIGHT CORPORATION)
• FY2025 10-K: …passenger growth. While we closely monitor these industry metrics, our success and future growth in the commercial aerospace market is primarily tied to the anticipated growth in aircraft production rates (e.g., Boeing 737 and 787, Airbus A320 and A350), the timing of our order placement, continued partnering with…
• FY2025 10-K: …90% of our sales in this market and are highly dependent on new aircraft production from our primary customers, Boeing and Airbus. We have significant content on the majority of the commercial aircraft programs, where our business is more leveraged to narrowbody (~60%) than widebody (~40%) commercial aircraft. We…
• DRS (Leonardo DRS, Inc.)
• FY2025 10-K: ASC") and Integrated Mission Systems ("IMS"). For information regarding segment performance see Part II, Item 7, " Management's Discussion and Analysis of Financial Condition and Results of Operations " in this Annual Report. Advanced Sensing and Computing Our ASC segment designs, develops and manufactures sensing and…
• FY2025 10-K: …and power generation and management are central to these priorities. Demand for our technologies is concentrated in areas of sustained priority for the DoW, including counter‑unmanned aircraft systems ("C-UAS"), advanced infrared sensing, network computing, and electric power and propulsion for next generation navy…
• KTOS (Kratos Defense & Security Solutions, Inc.)
• FY2025 10-K: …property and past performance qualifications and by offering a wider range of comprehensive low-cost technology leading and proven products and solutions compared to our competitors. In regard to areas of specialization, our product and solution offerings include the manufacturing of specialized defense electronics;…
• FY2025 10-K: …commercial customers. Improve operating margins. We believe that we have opportunities to increase our operating margins and improve profitability in the future as we transition from certain development programs, which typically generate inherently lower margins, to production programs, which typically generate…
• MRCY (MERCURY SYSTEMS, INC.)
• FY2025 10-K: …also saves our customers valuable time and expense, as their initial costs to integrate modules and components typically far exceed the costs of the individual product procurement. This benefit continues over time because we are continually investing R&D into our products. This allows us to provide our customers the…
• FY2025 10-K: …by the growing demand for domestically designed, sourced and manufactured electronics for critical aerospace, defense and intelligence applications. Our primary market positioning is centered on making commercially available technologies profoundly more accessible to the aerospace and defense sector, specifically as…

Process Flow Technologies (reported)

• WTS (WATTS WATER TECHNOLOGIES INC)
• FY2025 10-K: ​ New Product Development and Engineering ​ We retain our own product development staff, design teams, and testing laboratories in the Americas, Europe and APMEA that work to enhance our existing products and develop new products and solutions with a focus on sustainable, customer-centric technological innovation and…
• FY2025 10-K: $ 2.0 million of restructuring charges recognized in the Europe segment related to cost saving actions and primarily include severance costs. ​ Included in "Other Actions" for the year ended December 31, 2023, was $ 1.1 million of restructuring charges recognized in the APMEA segment related to Enware Australia Pty…
• FLS (FLOWSERVE CORP)
• FY2025 10-K: …permit real-time system analysis, system warnings and remote indication of asset health. These technologies have been developed in response to the growing demand for reduced maintenance, improved process control efficiency and digital communications at the plant level. We are committed to further enhancing the…
• FY2025 10-K: …this Annual Report. Business Functions Our business segments share a focus on industrial flow control technology and have a number of common customers. These segments also have complementary product offerings and technologies that are often combined in applications that provide us a net competitive advantage. Our…
• DOV (DOVER Corp)
• FY2025 10-K: …service solutions used in textile, apparel, soft signage and specialty materials markets. Businesses within this segment leverage digital printing capabilities and operate business models that involve initial equipment and software sales followed by consumable, software, and service aftermarket revenue streams. Our…
• FY2025 10-K: Pumps & Process Solutions segment earnings for the year ended December 31, 2025 increased $115.0 million, or 21.4%, compared to the prior year. The increase was primarily driven by higher volumes, productivity initiatives, favorable portfolio mix and the impact from acquisitions. Segment margin increased to 30.3% from…
• IEX (IDEX CORP)
• FY2025 10-K: …process. The CODM considers Adjusted EBITDA budget and forecast-to-actual variances when making decisions about the allocation of operating and capital resources to each segment. Adjusted EBITDA is also used in determining the compensation of certain employees. 68 Table of Contents The HST segment designs, produces…
• FY2025 10-K: …and Krakow, Poland. MyTana maintains operations in St. Paul, Minnesota. All entities have various sales and service outlets across the United States and Europe. • Trebor is a leader in high-purity fluid handling products, including air-operated diaphragm pumps and deionized water-heating systems. Trebor products are…
• XYL (Xylem Inc.)
• FY2025 10-K: …with product offerings in the filtration and separation, disinfection, and wastewater solutions, for municipal and industrial applications. In the Water Infrastructure segment we reach customers indirectly, through channel partners and distributors, directly and through our service capabilities. • Applied Water…
• FY2025 10-K: …industry. We set ourselves apart in the industry by focusing on our communication network, innovation, new product development and service offerings which deliver tangible savings by supporting operational efficiencies in meter reading and billing, and reducing non-revenue water through improved meter accuracy,…
• ITT (ITT INC.)
• FY2025 10-K: …end-users. IP's customers operate in global infrastructure and natural resource markets such as energy, chemical and petrochemical, pharmaceutical, general industrial, marine, mining, pulp and paper, food and beverage, power generation and biopharmaceutical. IP's marketplace-recognized brands include Goulds Pumps TM…
• FY2025 10-K: …and artificial intelligence continue to reshape manufacturing and industrial solutions. We view this shift as an opportunity to further enhance efficiency, reliability, and customer value but it also exposes us to additional cyber related risks and the possibility 30 that our competitors are able to adapt and utilize…
• GGG (GRACO INC.)
• FY2025 10-K: …then supply to their customers. Industrial The Industrial division designs and manufactures liquid finishing and advanced fluid dispensing equipment; pumps to move chemicals, petroleum, food, and other fluids; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators.…
• FY2025 10-K: …much of the technology and many of the features inherent in our products, if we are unable to effectively meet these challenges, they could adversely affect our revenues and profits and hamper our ability to grow. Competitors and others may also initiate litigation to challenge the validity of our intellectual…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.