Back to top

CBRE (CBG) Eyes Acquisitions for Growth: Should You Buy?

Read MoreHide Full Article

We updated our research report on CBRE Group, Inc. (CBG - Free Report) , the Los Angeles, CA-based commercial real estate services and investment firm, on May 19, 2015.

The company boasts extensive knowledge of domestic and international real estate markets that enables it to operate as a single-source provider of real estate solutions.

Further, opportunistic acquisitions play a key role in enhancing CBRE’s geographic coverage as well as broadening and strengthening its service offerings. In 2014, the company had successfully integrated Norland and increased its revenues by approximately 20% to $869 million. This apart, the company had integrated 11 infill acquisitions in the same year. In first-quarter 2015, the company accomplished one in-fill acquisition of a Texas-based commercial real estate firm engaged in retail services.

As market conditions continue to improve, we believe that opportunistic acquisitions would serve as growth drivers, supplementing CBRE’s organic growth. Very recently, the company announced the buyout of its affiliate in Columbia, South Carolina. With this acquisition, CBRE Group has brought its entire operations in South Carolina into a single, integrated and corporate-owned platform.

Notably, CBRE reported first-quarter 2015 adjusted earnings of 32 cents per share, comfortably beating both the Zacks Consensus Estimate and the prior-year quarter figure of 25 cents. A rise in revenues aided the results.

However, competition from international, regional and local players, exposure to unfavorable foreign currency movements and uneasiness in certain global economies remain as concerns before CBRE.

Over the past 7 days, the Zacks Consensus Estimate for the stock has remained unchanged at $1.95 for 2015 and $2.22 for 2016.

CBRE currently carries a Zacks Rank #2 (Buy).

Key Picks from the Sector

Investors interested in the real estate operations industry may consider stocks like HFF, Inc. (HF - Free Report) , Jones Lang LaSalle Incorporated (JLL - Free Report) and Kennedy-Wilson Holdings, Inc. (KW - Free Report) . While HFF sports a Zacks Rank #1 (Strong Buy), both Jones Lang LaSalle and Kennedy-Wilson Holdings carry the same Zacks Rank as CBRE.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

More from Zacks Analyst Blog

You May Like