Crispr Therapeutics shares tumble after significant earnings miss
On Tuesday, UBS analyst Damian Karas upgraded Crane Co. (NYSE:CR) stock from Neutral to Buy, setting a new price target of $190, up from the previous target of $157. This change reflects a renewed confidence in the company’s long-term earnings potential and the opportunities for mergers and acquisitions. Currently trading at $148.67, Crane commands a market capitalization of $8.55 billion, with analyst targets ranging from $144 to $200. According to InvestingPro data, the stock maintains a "GOOD" overall financial health score.
Crane Co., which recently hosted an Aerospace & Defense (A&D) investor event and provided a first-quarter 2025 update, has seen its shares drop by 21% from their peak. However, UBS now sees this as an overcorrection. According to Karas, the market has only priced in an approximate 3% compound annual growth rate (CAGR) in sales and about a 100 basis points margin expansion over the next two years. This is conservative compared to UBS’s forecast of a 6% sales CAGR and roughly 250 basis points margin expansion.
Karas highlighted Crane’s strong balance sheet, noting its net leverage ratio at negative 0.4 times. Given this financial position and the potential for effective capital deployment, he suggests that the stock should trade closer to $190, with the possibility of exceeding $230. The analyst also pointed out the limited downside risk to the company’s earnings per share (EPS), with only a low single-digit percentage of cost of goods sold (COGS) exposed to import tariffs. InvestingPro analysis reveals a healthy debt-to-equity ratio of 0.19 and a strong current ratio of 2.58, supporting the company’s solid financial position. Get access to detailed financial health metrics and more with an InvestingPro subscription.
The updated 2025 guidance issued by Crane was deemed "overly conservative" by Karas. He believes the company’s 15% growth in orders and 12% increase in backlog during the first quarter, even when compared to challenging comparable periods, should boost investor confidence.
Crane’s performance during the Covid-19 pandemic was also a point of commendation. The company managed to maintain strong margins despite the global supply chain disruptions, achieving net positive price/cost outcomes. This resilience, according to UBS, is a testament to Crane’s ability to mitigate current tariff headwinds and adapt effectively.
In other recent news, Crane Co. reported its fourth-quarter 2024 earnings, revealing a slight miss on Wall Street’s expectations with an earnings per share (EPS) of $1.26, compared to the forecasted $1.29. The company’s revenue also fell short, reaching $544 million against a projected $578.57 million. Despite these misses, Crane demonstrated a strong annual performance, with a 28% increase in adjusted EPS for the full year 2024 and a 14% rise in sales. Looking ahead, Crane projects an adjusted EPS growth of 12% for 2025, driven by strong demand in its aerospace and defense sectors. In addition, DA Davidson maintained a Buy rating on Crane, with a price target of $200, following positive insights from the company’s 2025 Investor Day. Conversely, Stifel adjusted its price target for Crane to $144, maintaining a Hold rating, due to anticipated economic challenges. These recent developments reflect varying perspectives from analysts on Crane’s market performance and future potential.
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