After Crane Co.'s (NYSE:CR) earnings announcement on 30 June 2019, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 12% next year against the past 5-year average growth rate of 7.6%. With trailing-twelve-month net income at current levels of US$336m, we should see this rise to US$377m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Crane in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Crane to keep growing?
Longer term expectations from the 7 analysts covering CR’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 7.8% based on the most recent earnings level of US$336m to the final forecast of US$432m by 2022. EPS reaches $6.82 in the final year of forecast compared to the current $5.63 EPS today. With a current profit margin of 10%, this movement will result in a margin of 12% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Crane, I've put together three fundamental aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Crane worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Crane is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Crane? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.