Crane Company (NYSE: CR) is known for engineered industrial products in the Aerospace & Electronics segment and Process Flow Technologies segment. While this included nuclear for about 5% of its total sales, Crane just announced it was acquiring the Precision Sensors & Instrumentation business from Baker Hughes (NYSE: BKR) for about $1.1 billion versus a $10 billion market capitalization for its stock. This deal compliments multiple sectors for Crane, but Wall Street is focused on what this adds for Crane’s nuclear exposure.
Wall Street seems to have an insatiable demand for anything tied to nuclear power. All those new power-hungry AI datacenters are adding more and more to electricity demand. Oggonomics would remind investors that Crane is not exactly neglected by investors. Its $187 current share price was just at a 52-week high earlier on Tuesday.
MORE NUKE BIZ, PLUS MORE
On the announcement of the transaction, Crane indicated that PSI is expected to have 2025 sales of approximately $390 million and an adjusted EBITDA of approximately $60 million. Within our Aerospace & Electronics segment, the addition of the Druck brand is being shown to meaningfully strengthen Crane’s pressure sensing capabilities across critical applications. And within its Process Flow Technologies segment, Crane noted that the addition of Reuter-Stokes will double the size and capabilities of its existing Crane Nuclear business.
Crane’s total 2024 revenues of $2.1 billion were broken down as roughly $900 million from its aerospace & electronics segment. The larger balance came from the process flow technologies segment — and about 10% of that segment’s revenue was from orders tied to nuclear power.
WALL STREET SPEAKS
A report from Deutsche Bank pointed out that the acquisition of Precision Sensors & Instrumentation effectively doubles this output, and Crane will now have about 10% of total sales targeting nuclear-related orders. The firm has a Buy rating and $226 price target.
UBS reiterated its Buy rating and raised its price target to $215 from $190 for Crane after the $1.15B cash acquisition. The firm has been expecting Crane’s first big deal and now it has arrived. It expects more acquisitions in the coming years.
BofA Securities maintained a Buy rating and kept its $200 price objective in the wake of the acquisition. The firm looks favorably on the deal because it bolsters existing sensor-based technologies across key end markets for the company (including aerospace, nuclear, and process industries). BofA also expects more deals to come for Crane — “We continue to expect the company to remain active in pursuing deals with approximately $3 billion in capital available for M&A or share repurchases (through 2028) following the close of the deal.”
Zacks currently has a Hold rating for Crane, but the financial publication sees this PSI acquisition complementing Crane’s existing product portfolio while boosting its technological capabilities in core end markets (aerospace, defense, and process sensing and more). It noted that this acquired product line should add to Crane’s long-term sales growth “and a 10% return on invested capital by the fifth year following the deal’s closure.”
IN THE END…
Crane may sound expensive at 34-times earnings, but that’s actually a discount versus many peers who are riding the nuclear power wave higher.
Crane’s 52-week trading range is $127.04 to $191.00 and its consensus analyst price target was closer to $189 ahead of the deal.
DISCLAIMER
All analyst ratings and price targets mentioned above were issued by the firms named in this summary. Their ratings and targets may differ greatly from other firms on Wall Street. Oggonomics does not issue any formal ratings and does not maintain any price targets of its own on Crane’s stock. Also please remember that no analyst report, even those with very strong conviction, ever comes with any guarantees of profits and they never contain money-back guarantees in case you lose money.
