Bear Stearns upgraded Crane (CR) to outperform from peer perform, citing the company's recently raised earnings forecast for 2005 and 2006.
Analyst R. Scott Graham says the company's $2.45 to $2.60 2006 earnings per share guidance is better than expected. Graham believes the most important takeaway from the meeting was Crane's focus on margin expansion in Fluid Handling, Electronics, and Merchandising businesses. Graham is now convinced margin expansion will continue into 2007 or longer, and will exceed prior forecasts. The analyst raises 2006 earnings per share estimates by 6% to $2.48, and sets $2.75 for 2007, with implied growth of 11% in each year. Graham also sets a year end 2006 target price of $42.