CRANE COMPANY (CR): what the price requires

At today's price, CRANE COMPANY (CR) is priced for today's economics sustained for ~8.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CR

Headline

FieldValue
TickerCR
CompanyCRANE COMPANY
Current price$214.98/sh
CompositionCommercial Original Equipment 17% / Military Original Equipment 13% / Commercial Aftermarket Products 11% / Military Aftermarket Products 5% / Process Valves and Related Products 41% / Commercial Valves 6% / Pumps and Systems 7%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed18.9%
Operating margin today17.5%
Margin expansion implied+1.4pp
Must persist for8.1y
Multiple paid32x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 10.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.

How unusual the bet is: elevated

ReferenceValue
vs own history-0.56σ
cohort percentile (of 225 peers)73
sustained it ~8.1 years at this level19%
implied end-window share0%

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.

FamilyMedian price/FVModelsReads
Asset3.21x5expensive
Earnings5.25x3expensive
Relative2.52x5expensive
Growth1.22x1expensive

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

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noNegative/zero FCF — equity value floored at $0
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$134.451.60xyesP/E 24.19x (blended: static sector reference 18x + trailing (TTM) 39x), scenarios: 20.1x / 24.2x / 28.2x (bear / base = reference held flat / bull), EV/EBITDA 16.67x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$60.153.57xyesBV/sh $35.72, ROE (TTM) 15.6%, ke 9.3%
Two-Stage Excess ReturnAsset$77.082.79xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$176.261.22xyesRev $2.4B, growth 7% (input: historical growth; tapered), Terminal P/S: 4.3x / 5.2x / 6.0x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$66.843.22xyesEPS $5.57, growth 0% (input: historical EPS growth), PEG=281.13 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$33.676.38xyesNormalized EBIT (4y avg op income, one-time charges added back) $0.31B × (1−21%) / WACC 8.5% → EPV (no growth)
Residual IncomeAsset$78.692.73xyesBV $35.72 + 5yr PV of (ROE (TTM) 15.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$66.913.21xyes√(22.5 × EPS $5.57 × BVPS $35.72) — Graham's conservative floor
EV/EBITDA RelativeRelative$85.322.52xyesEBITDA $0.49B × sector EV/EBITDA 12.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$40.965.25xyesEPS $5.57 × (8.5 + 2×0.1%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$11.1819.23xyesBV $35.72 × (ROIC 2.7% / WACC 8.5%)
P/Sales SectorRelative$104.082.07xyesRevenue $2.44B × sector P/S 2.5x
PEG Fair ValueRelative$27.857.72xyesEPS $5.57 × (PEG 1.5 × growth 0.1% (input: historical EPS growth)) → PE 0.2x
Earnings YieldEarnings$60.223.57xyesEPS $5.57 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$890.0m
Net debt / NOPAT (after-tax)2.67x
Net debt / operating income (pre-tax)2.11x
Interest coverage15.9x
Share count CAGR (dilution)0.8%
Burning cashno

Bullet Takeaways

Bull Case

Frame the stage, because Crane is not a mature, slow industrial: it is a growth-phase compounder, and the numbers should be read that way. Q1 2026 net sales jumped 24.9% to $696.4 million, adjusted EPS rose 15% to $1.65, and management raised full-year adjusted EPS guidance to $6.65 to $6.85. The growth comes from two sources working together: 4% core sales growth, led by Aerospace and Advanced Technologies, and a string of acquisitions. The January acquisitions of Druck, Panametrics, Reuter-Stokes, and an optical-measurement business are already expected to add at least $0.15 to full-year EPS, double management's initial projection, and the company points to a healthy M&A pipeline targeting about $500 million in further deals.

The quality of the businesses justifies the growth premium. Aerospace and Advanced Technologies pairs original-equipment sales with a high-margin, recurring aftermarket stream, the parts and service that flow for decades after a platform is sold, and management guides that segment to the high end of a 7% to 9% growth range with 35% to 40% incremental margins. Process Flow Technologies supplies engineered valves and pumps into industrial and chemical end markets where switching costs and specification lock-in protect pricing. The 10-K points to operating-profit improvement "driven primarily by productivity benefits" alongside sales growth (accession 0001944013-26-000095). Return on equity near 15.6% and interest coverage near 18x show a financially healthy compounder.

The inversion frames the bet honestly: at $215.11 the price implies growth held near the self-funding ceiling for about eight years. That is demanding, but Crane has a credible path, mid-single-digit core growth plus a proven, accretive acquisition machine, that few industrials can match. The discounted-future-market-cap method near $199 nearly reaches the price, and the relative-multiple lens near $138 reflects a premium the aftermarket mix can support. The bull case is that Crane is a durable, well-run growth industrial whose aerospace aftermarket and disciplined M&A let it compound at a rate that the static methods, which assume no growth or no deals, structurally cannot capture.

Bear Case

The macro variable with the most leverage on Crane is the industrial and aerospace cycle, and the premium price leaves no room for it to turn. Process Flow Technologies sells into chemical, refining, and general industrial end markets whose capital spending swings with the global manufacturing cycle, and management already guides that segment to flat-to-low-single-digit core growth. Commercial aerospace original equipment depends on aircraft build rates and airline capital plans, both sensitive to recession and to supply-chain constraints. A downturn in industrial capex or a pause in aircraft production would hit the core growth the price is extrapolating, and at this multiple even a modest deceleration is costly.

The valuation gap is the heart of the problem. At $215.11 (June 27, 2026) only the growth-DCF lens reaches the price. Every conservative frame lands far below: the relative-multiple view near $138, Earnings Power Value near $30, the Graham number near $67, and the ROIC-justified book value near $11. The inversion implies growth held at the self-funding ceiling for roughly eight years, a pace only about 19% of comparable fast-growers have historically sustained. The Peter Lynch screen flags an extreme overvaluation because trailing EPS growth has been near zero, which exposes how much of the price depends on future acquisitions rather than current organic earnings power.

The acquisition dependence is its own risk. Much of the 24.9% sales growth came from deals, not core demand, and a roll-up only works while targets are available at accretive prices and integrate cleanly. The $500 million M&A pipeline is a plan, not a guarantee, and a dry pipeline or an overpaid deal would break the EPS bridge the market is paying for. Free cash flow was negative on a trailing basis as the company funded acquisitions, and the dividend yield is negligible, so there is no income support if the multiple compresses. The bet against Crane is that the price assumes a flawless combination of sustained core growth, a continuous accretive deal flow, and a cooperative industrial cycle, and that any one of those faltering pulls the stock back toward the cluster of conservative methods well below the current price.

Valuation

At $215.11, inverting the price puts Crane at roughly 32x company-wide operating income, which solves to growth held at the 25% self-funding ceiling for about eight years, computed at a 10.2% cost of capital. Each percentage point of cost of capital moves the implied horizon by roughly 1.9 years. That is an elevated assumption, above what fundamentals comfortably support, and only about 19% of comparable fast-growers have sustained such a pace for that long.

The model families split the way they do for a premium growth industrial. Only the growth lens reaches the price: the discounted-future-market-cap method near $199. Everything else lands well below: relative valuation near $138, two-stage excess return near $77, residual income near $79, the Graham number near $67, and Earnings Power Value near $30. The blended X-ray near $72 is a fraction of the price. The Peter Lynch and PEG figures are distorted by near-zero trailing EPS growth and should be read as flags rather than targets. The FCF-based methods are gated off because trailing free cash flow was negative during the acquisition-heavy period.

The valuation conclusion is that the price is a bet on durable compounding, organic plus acquired, that the static frames cannot price, and the size of the gap between the price and the blended methods makes it a demanding bet. The case for it is the aerospace aftermarket annuity and a proven M&A engine; the case against it is that the same price assumes both run uninterrupted for years. The deciding variable is whether Crane sustains mid-single-digit core growth and a steady stream of accretive deals through the industrial cycle, because that, not survival, is what separates a fair price from an expensive one here.

Catalysts

Acquisition execution is the catalyst that drives the model. The January deals (Druck, Panametrics, Reuter-Stokes, and an optical-measurement business) are already tracking to add at least $0.15 to full-year EPS, double the initial estimate, and management points to a roughly $500 million M&A pipeline. New deals and clean integration extend the growth story; a dry pipeline or an overpriced deal would undercut it.

Segment trends are the organic read. Aerospace and Advanced Technologies is guided to the high end of 7% to 9% growth with 35% to 40% incremental margins, while Process Flow Technologies is guided flat to low single digits. The next earnings reports test whether aerospace momentum holds and whether the industrial-facing valve and pump business stabilizes. Core sales growth and segment margins are the cleanest signals.

Guidance frames the bar. Management raised full-year 2026 adjusted EPS guidance to $6.65 to $6.85 on revenue of $2.845B to $2.875B, after Q1 2026 sales rose 24.9% to $696.4 million. A leadership transition plan is also in motion, worth monitoring for continuity of the acquisition strategy. The dominant external variables are the industrial capex cycle and commercial aircraft build rates, which drive the core growth the valuation extrapolates.

Sources: Crane Q1 2026 transcript (Motley Fool), Crane Q4 2025 results and 2026 guidance (Business Wire), Crane investor summary (Quartr)

Peer Cohorts (Per Segment, With Filing Citations)

Aerospace & Advanced Technologies (reported)

Process Flow Technologies (reported)

Methodology Note

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.

View the full interactive CR report on boothcheck