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Crane Co. Reaches 52-Week High

Zacks Equity Research

Shares of Crane Co. (CR) touched a new 52-week high of $67.40 during the trading session on Dec 27. This is an increase over the previous high of $67.38 reached on Dec 26.  

Crane Co’s shares closed at $67.21 at the end of trading on Dec 27, with a solid year-to-date return of 45.1%. The volume of shares traded during that session was 0.11 million. Further upside potential exists for this Zacks Rank #3 (Hold) diversified machinery company as reflected by its earnings growth rate of 9.1% for the next five years and year-over-year growth rate of 10.3% for 2014.

Growth Drivers

Crane Co. completed the acquisition of MEI Conlux Holdings for approximately $804 million on Dec 11, 2013. Following which shares have risen 3.4%.

The acquired assets are expected to be a boon for Crane Co. and bring in earnings accretion of 20 cents per share in the first twelve months after completion of the transaction. Also, by the third year of the acquisition, the company anticipates 30 cents or $25 million of pre-tax synergies.  

Excluding the acquisition, a brief of Crane Co’s third-quarter financial result has been provided below:

Crane Co. reported adjusted earnings per share of $1.04 for the quarter, reflecting an increase of 5.0% over the year-ago quarter but 1.9% below the Zacks Consensus Estimate of $1.06 per share. Net sales were down 1.3% due to a 1% decrease in core sales and roughly 0.3% of negative impact from foreign currency translation.

Despite an unimpressive third-quarter result and negative average earnings surprise of 2.7% for the trailing four quarters, we are optimistic of the company’s acquisition synergies. Earnings ESP for 2014 is at +1.5%.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for Crane Co. rose 1.1% to $4.63 for 2014. The estimate for 2013 is pegged at $4.19.
Crane Co. currently has a market capitalization of $3.9 billion. Better-ranked companies in the industry include Carlisle Companies Incorporated (CSL), CLARCOR Inc. (CLC) and Tyco International Ltd. (TYC). All these stocks hold a Zacks Rank #2 (Buy).

Read the Full Research Report on TYC
Read the Full Research Report on CLC
Read the Full Research Report on CSL
Read the Full Research Report on CR

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