Crane Company (CR): A Bull Case Theory

We came across a bullish thesis on Crane Company on Valueinvestorsclub.com by gb48. In this article, we will summarize the bulls’ thesis on CR. Crane Company's share was trading at $180.37 as of December 1st. CR’s trailing and forward P/E were 32.97 and 26.60 respectively according to Yahoo Finance.

Crane Company (CR) has undergone a transformative portfolio and capital allocation overhaul in recent years, shedding non-core, lower-margin assets to focus on high-return businesses. Today, CR operates a balanced portfolio of aerospace & defense (A&E) components and process flow technologies (PFT), both highly engineered, mission-critical, and often sole-sourced, with #1 market positions in multiple niches.

The company has delivered 20%+ organic EPS growth, underpinned by value-based pricing, strong aerospace tailwinds, and disciplined capital allocation, while maintaining net leverage of just 1x and high returns on invested capital. Management has actively deployed capital into accretive M&A, including three smaller acquisitions in 2023–24 that achieved 17–18% revenue growth and 48–60% EBITDA expansion within the first year, alongside its largest acquisition, Precision Sensors & Instrumentation, for $1.1bn, expected to be at least 10% EPS accretive over several years. CR’s organic growth remains robust, with A&E expanding 12–13% and PFT 3–5%, supported by strong bookings and backlog growth, as well as new value-based pricing initiatives across its product lines.

The company’s guidance and operating leverage position it for 15–20% IRRs over the next several years, with further upside potential if A&E and PFT are eventually separated or if CR becomes an acquisition target, benefiting from the aerospace industry’s ongoing consolidation. Trading at a 2026 FCF yield of >4% and 24x P/E versus peer averages of 3.5% FCF yield and 36x P/E, CR offers compelling risk-adjusted returns, underpinned by high-margin, capital-light businesses with strong growth, deep moats, and multiple catalysts including M&A, potential breakups, and strategic takeout opportunities. The combination of disciplined execution, financial flexibility, and strategic optionality makes CR an attractive investment with both near-term and long-term upside.

Previously we covered a bullish thesis on Graco Inc. (GGG) by Stock Analysis Compilation in December 2024, which highlighted its leading position in fluid handling equipment, durable parts demand, pricing power, and high margins. The stock has depreciated approximately 2.90% since our coverage due to broader economic weakness. The thesis still stands. gb48 shares a similar bullish view but emphasizes Crane Company’s portfolio transformation, strong organic EPS growth, and accretive M&A.

Crane Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held CR at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of CR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CR and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.