Crane NXT, Co. (CXT) stock intrinsic value fair value estimate & owner earnings analysis

Crane NXT makes two kinds of products. Crane Payment Innovations (about 51% of 2025 sales, $846.6M) builds the coin and bill validators, recyclers and payment devices inside vending machines, kiosks, gaming machines and retail equipment. Security and Authentication Technologies (about 49%, $810.1M) makes the paper, threads and security features used in banknotes, including for the U.S. government, plus brand-protection and authentication products acquired with OpSec (May 2024) and De La Rue's authentication business (May 2025). In April 2026 the company also completed its takeover of Antares Vision, an Italian maker of inspection and track-and-trace systems, and delisted it. How we measured earnings. We start with cash from operations and remove the swings from working capital, then subtract stock compensation as a real cost and subtract the capital spending needed just to stay in business. Because a large debt load was added in 2024 to 2026, we then add back the cash interest paid, so we value the business before its lenders and subtract what it owes separately. That gives business cash flow per share of $5.03 (2021), $4.89 (2022), $4.89 (2023), $4.41 (2024) and $4.52 (2025). We use 2023 to 2025, the years as a stand-alone company with today's capital spending level, and take the middle figure: $4.52 per share, about $262M a year. The 2021 and 2022 years had much lower capital spending ($18.6M and $21.3M versus $43.2M in 2025) and describe a lighter-investment business. Filings before 2021 under this company's registration describe the former Crane Co and are not used. Roughly $59.5M of 2025 depreciation and amortization is acquired-intangible amortization, a non-cash charge that is correctly added back; the risk that acquired customer relationships wear away is carried in the declining growth paths below rather than by lowering the starting level. Capital spending ($43.2M) is close to ordinary depreciation (about $47.1M), so we treat spending as maintenance apart from a small growth portion. Growth. Business cash flow per share grew 2.4% in 2025 ($4.52 versus $4.41). Our base case starts year one at a 1.5% decline, which is below that figure, so no deceleration has to reverse. What is in the record: Payment Innovations sales fell 3.0% in 2025 (core sales down 3.6%, vending volumes weaker), its operating profit fell 3.0% to $221.6M, and its order backlog dropped from $216.8M (2023) to $145.8M (2024) to $113.4M (2025). That is a named, repeated decline. In the Security and Authentication segment, banknote and security product sales grew from $500.4M to $592.4M over 2023 to 2025 (about 8.8% a year), but the filing says results swing with the timing of central bank and U.S. government orders, and the segment's operating margin fell from 23.0% (2023) to 18.1% (2024) to 12.0% (2025) as acquisitions were added. The De La Rue authentication business contributed $89.4M of sales and an operating loss of $7.9M from May 1, 2025. Because acquired businesses have so far diluted profit, we give no credit for margin recovery or for Antares Vision's earnings; the cash spent on Antares Vision is counted in debt, which makes our figures conservative if it performs well. First-half 2026 sales were $880.9M versus $734.7M (up 19.9%, mostly from acquisitions), operating cash flow was $72.7M versus $43.7M, and stock compensation rose to $19.2M from $6.0M. Two quarters do not change our starting level. Debt. At June 30, 2026 the company owed $1,453.9M ($1,260.0M long-term plus $193.9M short-term borrowings) against cash of $231.4M, of which we treat $60M as needed to run the business. Its debt includes $350M of 4.20% notes due 2048, $200M of 6.55% notes due 2036, and a revolving credit line and term loans that mature in December 2030 (Term Loan A and revolver) and December 2032 (Term Loan B) at floating rates of roughly 1.5% to 2.75% over benchmark rates. Credit ratings are BB+ (S&P) and Ba1 (Moody's). The bank agreement limits total net debt to earnings to a maximum that steps down to 4.25 times (with a temporary allowance up to 5.5 times after large acquisitions). Because the 4.20% notes cost far less than 6% for 22 years, we reduce debt by about $75M; the 6.55% notes cost slightly more, adding about $8M. We also count $20.7M owed to outside holders of the Antares Vision reinvestment shares. Obligations used in the base and bull cases total about $1,236M, or $21.31 per share on 58.0M diluted shares. The three cases, each valued at a 6% discount rate. Base: business cash flow declines 1.5% a year for ten years (Payment Innovations' evidenced decline, with no credit for unproven Security and Authentication growth), then keeps declining 4% a year afterward because nothing named replaces the secular fall in cash use and vending activity. The business is worth about $51.64 per share (roughly $3.0B), it owes about $21.31 per share ($1,236M), leaving $30.33 per share. Bear: Payment Innovations' backlog erosion and vending weakness continue and acquired businesses stay at today's thin margins, so business cash flow falls 5% a year for ten years and 8% a year afterward. The business is worth about $35.88 per share (roughly $2.1B). Because the credit line and term loans come due in 2030 to 2032 while earnings are shrinking against a covenant that tightens to 4.25 times, we assume roughly 2 percentage points of extra interest on about $920M of floating debt for eight years, adding about $114M; total obligations are about $1,350M, or $23.28 per share, leaving $12.60 per share. Business cash flow stays above interest costs in this case, so debt is serviceable, but the equity is thin relative to the debt. Bull: the company's own strongest lever keeps working. Banknote and security sales keep growing near the pace shown in 2023 to 2025 while Payment Innovations declines, netting about 2% a year of growth for five years, tapering to 1% for five more, then a 2% annual decline. The business is worth about $72.14 per share (roughly $4.2B), it owes $21.31 per share, leaving $50.83 per share. What we tested. We challenged the idea that Payment Innovations declines only gradually: its 2025 profit fell in step with sales because pricing and cost cuts offset volume, which supports a gradual, not sudden, decline, but its shrinking backlog is why we do not assume it stabilizes. We also tested whether the bull case needs margin recovery; it does not, since it rests only on sales growth already shown. The main things that could prove this wrong are faster losses at Payment Innovations, delays in U.S. and central bank banknote orders, or, on the upside, Antares Vision and De La Rue turning into real cash contributors, which we have not credited. Change since our previous analysis. We previously valued the business at $3.00 (bear), $21.10 (base) and $36.71 (bull). The figures are now higher mainly because we now discount every company at the same 6% rate and value the business before interest with debt subtracted separately, rather than using discount rates of 10% to 12%. On the evidence, most changes were negative: we now assume slow decline rather than 3% growth, debt is higher after the Antares Vision takeover, and acquired businesses have diluted margins. The offsetting positives are higher first-half 2026 sales and operating cash flow. Sources: the company's 2025 annual report and 2026 second-quarter filing for all figures; a news report for the April 2026 completion date of the Antares Vision takeover. Management's guidance was not used.