PNR - Crane Has Cycle And Performance Challenges But Looks Undervalued

• Crane had a rough end to the fourth quarter, with a 21% drop in organic revenue and operating income that missed expectation by 12%.
• Fluid Handling beat expectations on revenue but missed on margins; orders were up sequentially, and key markets like chemicals and pharma are looking healthier.
• Aero is going to need more time; management expects a double-digit decline in commercial aero sales in '21, and the recovery here is probably a '22/'23 story.
• Crane will lag shorter-cycle industrial names in 2021 in terms of growth, but the valuation more than reflects that, and these shares look undervalued as a longer cycle recovery play.

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