Crane Company (CR): A Bull Case Theory

Core Thesis - Crane Company has undergone a significant transformation by focusing on high-return businesses and shedding non-core assets, leading to a balanced portfolio in aerospace & defense and process flow technologies [2][3] Financial Performance - The company has achieved over 20% organic EPS growth, driven by value-based pricing, strong aerospace market conditions, and disciplined capital allocation [3] - Management has maintained a net leverage of just 1x while achieving high returns on invested capital [3] - Recent acquisitions have resulted in 17-18% revenue growth and 48-60% EBITDA expansion within the first year, including a major acquisition for $1.1 billion expected to be at least 10% EPS accretive over several years [3] Market Position and Growth - Crane Company operates in high-margin, mission-critical sectors with leading market positions, experiencing organic growth rates of 12-13% in aerospace & defense and 3-5% in process flow technologies [3] - The company is well-positioned for 15-20% internal rates of return (IRRs) over the next several years, with potential for further upside through strategic separation or acquisition [4] Valuation and Investment Appeal - Trading at a 2026 free cash flow yield of over 4% and a P/E ratio of 24x, compared to peer averages of 3.5% FCF yield and 36x P/E, Crane Company presents compelling risk-adjusted returns [4] - The combination of disciplined execution, financial flexibility, and strategic options makes Crane Company an attractive investment opportunity with both near-term and long-term upside [4]