CR

We rate Crane Co (CR) as a Hold with a composite score of 54.7/100 at a current price of $204.47. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (70th percentile) and stability (67th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (27th percentile) and value (41th percentile) tempers our overall conviction. We assign a Narrow Moat rating (51/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Crane Co holds a lower-quartile position (#42 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 54.7/100 places it at rank #1298 in our full 7,333-stock universe. With a $10.6B market capitalization, Crane Co operates at meaningful scale within the Construction sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 11%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 42% (+18.4pp vs sector) narrow to operating margins of 19% (+11.2pp vs sector) and net margins of 15.9%, yielding a gross-to-net conversion rate of 38%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $204.47, Crane Co is trading near fair value based on current fundamentals. Our value factor score of 41/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 32.3x (a 69% premium to the sector median of 19.1x), EV/EBITDA of 27.8x (at a premium), P/B of 6.0x, P/S of 5.2x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to Crane Co. The company exhibits strong financial stability with a beta of 1.14, conservative leverage (29% D/E), and a stability factor in the 67th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 67th percentile with quality at the 70th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 42% provide a buffer against cost pressures; conservative leverage (29% D/E) limits balance sheet risk; above-average stability (67th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Crane Co's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 18.4%, disciplined leverage (29% D/E), best-in-class net margins of 15.9%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Crane Co approaches this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 0.49% dividend yield, and the combination of 14.2% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Crane Co receives a Hold rating with a composite score of 54.7/100 (rank #1298 of 7,333). Our quantitative framework assigns a Narrow Moat (51/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 52/100.

Our analysis supports a neutral stance on Crane Co. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.