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Crane Company (CR) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Crane Company (CR)

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Intrinsic Value (DCF)

Current$206.91
→
Intrinsic$109.93
-47%
$74.88$109.93$176.51
Current price reflects execution expectations above 18% growth — not unreasonable for quality businesses.
Range: Bear $75 → Bull $177. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $177).
Discount ↓Growth →14%16%18%20%
8%$133$145$157$170
10%$94$102$110$119
12%$72$78$84$91
14%$58$63$68$73

Bull Case

  • Bull case ($177) with 22% growth, 9% discount rate

Bear Case

  • Bear case ($75) implies 64% downside at 14% growth, 12% discount
  • Trading 47% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($177) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$278.90M
Year 2$329.33M
Year 3$388.87M
Year 4$459.17M
Year 5$542.19M
Terminal$7.98B

📐 Model Inputs

Growth Rate18.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$236.20MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is CR stock undervalued or overvalued?
🔴 OVERVALUED

CR trades at $206.91 vs. our DCF-derived intrinsic value of $109.93, implying -44% downside. Using a 10.0% WACC and 18.1% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($163.43) suggests limited upside.

What is CR's intrinsic value?

Using a 5-year DCF model: Base FCF of $236M, projected at 18.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $13M net debt and dividing by 0.06B shares: Bear $73.11 | Base $109.93 | Bull $163.43. Current price $206.91 implies -44% to base case.

How is CR's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($6.42B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 27.2x.