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On Dec 4, Zacks Investment Research upgraded Jones Lang LaSalle Incorporated (JLL - Analyst Report) to a Zacks Rank #2 (Buy). The upgrade is based on the company’s recent deal with Gemalto and decent third-quarter 2013 results.

Why the Upgrade?

In recent times, Jones Lang LaSalle disclosed that it was selected by Gemalto – a leading international digital security company – to act as adviser for its worldwide real estate operations. With over 10,000 employees, Gemalto has presence in 43 countries across the world. The new deal is an extension of Jones Lang LaSalle’s ties with Gemalto, with which the former has been working for the past five years.

Moreover, after a disappointing performance in the prior quarter, Jones Lang LaSalle’s third-quarter 2013 adjusted earnings per share came in at $1.49, substantially ahead of the Zacks Consensus Estimate of $1.35 per share. It also came 21% above the year-ago quarter earnings of $1.23 per share, benefiting from decent growth in fee revenues, driven by Capital Markets & Hotels and Property & Facility Management and strong leasing performance.

The company also renewed and increased the capacity of its long-term credit facility of more favorable pricing. We believe that the measures provide the company the wherewithal to carry on investing in growth drivers going forward.

Notably, the company acquired a Houston-based property management company – Means Knaus Partners (MKP) in the third quarter to enhance its office property management capacities. Apart from this, it acquired the Kansas City-area commercial real estate firm, Capital Realty.

Owing to these bullish factors, the tendency for an upward estimate revision has been obvious in recent times. Over the last 30 days, the Zacks Consensus Estimate for 2013 rose 1.0% to $6.10. Moreover, for 2014, the Zacks Consensus Estimate moved up a notch to $7.00.

Additionally, the long-term earnings growth forecast for Jones Lang LaSalle is 13.8%. Hence, the favorable estimate revisions, driven by positive third-quarter results and the recent tie up made way for the upgrade in the rank.

Other Stocks to Consider

Apart from Jones Lang LaSalle, the other stocks worth considering in the Real Estate Operations sector include E-House (China) Holdings Ltd. (EJ - Snapshot Report), FirstService Corp. (FSRV - Snapshot Report) and Kennedy-Wilson Holdings, Inc. (KW - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

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