Analyst Ronald Epstein of Bank of America Securities maintained a Buy rating on Crane Company (CR – Research Report), retaining the price target of $200.00.
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Ronald Epstein’s rating is based on Crane Company’s strategic acquisition of Precision Sensors & Instrumentation (PSI) from Baker Hughes, which enhances its sensor technology capabilities across critical sectors like aerospace, nuclear, and process industries. This $1 billion deal, including a tax benefit, is seen as a positive move that aligns with Crane’s growth strategy through mergers and acquisitions, with significant capital still available for future deals or share repurchases.
Moreover, the acquisition is expected to significantly boost Crane’s sales and EBITDA, with the PSI brand strengthening its Aerospace & Electronics segment. The deal is projected to double the size of Crane’s Nuclear business and expand its technological portfolio in areas like LNG transport and chemical production. The acquisition meets Crane’s strategic and financial criteria, promising a 10% return on invested capital by the fifth year, and is anticipated to generate margin synergies. These factors contribute to the Buy rating, with expectations that the market will respond positively.
CR’s price has also changed slightly for the past six months – from $170.320 to $185.990, which is a 9.20% increase.