We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Reasons to Add CBRE Group (CBRE) to Your Portfolio Now
Read MoreHide Full Article
Shares of CBRE Group (CBRE - Free Report) have had an impressive run in the past year, appreciating 20.4% against its industry’s decline of 22.1%.
Image Source: Zacks Investment Research
In February, the company came up with better-than-expected fourth-quarter 2021 results, highlighting the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years. A healthy balance sheet and a supportive macro environment also benefited CBRE Group.
Fundamentals appear solid for this Zacks Rank #1 (Strong Buy) stock. Moreover, there is enough opportunity for the stock’s price appreciation in the near term. Let’s now delve deeper into its strengths.
Reasons to Buy CBRE Group
Robust Scale: As the largest commercial real estate services and investment firm (based on 2021 revenues), CBRE enjoys a robust scale. It is among a few companies offering a full suite of services to multinational clients. Moreover, the company has grown organically and banks on strategic in-fill acquisitions to boost its service offerings and geographic reach. With an expanded capability to service, the company’s number of large clients has increased significantly over the past years. As large corporations continue to seek consolidation of the number of service providers, CBRE Group is expected to remain a beneficiary of this trend.
Diversified & Contractual Revenue Base: CBRE Group has opted for a better-balanced and more resilient business model. In pursuit of this, the company has shifted to a more diversified and contractual revenue base over the past years. This makes the company relatively resilient to market disruptions and positions it well to navigate amid headwinds. Enhanced resiliency helped its performance amid the pandemic. Though transaction revenues had been soft, the broad diversification of deal sizes and property types helped the company sail through the challenging environment. Capital allocation scopes are expected to fuel growth and boost resiliency further. Also, geographical diversity helped the company tide over muted activity in some markets with solid growth elsewhere.
Occupiers Outsourcing Business: CBRE Group’s Global Workplace Solutions (GWS) segment, which provides a broad suite of integrated, contractually-based services to occupiers of real estate, including facilities management, project management, transaction management and management consulting, is well-poised to grow. Occupiers of real estate are increasingly opting for outsourcing and depending on the expertise of third-party real estate specialists to achieve an improvement in execution and efficiency.
As a result, CBRE is witnessing continued momentum from new and existing customers. Also, a high-quality client base is bumping up contractual revenues. The new business pipeline is gaining from client and property types, which are benefiting from secular shifts hastened by the pandemic. The pipeline remains solid and well-diversified.
Balance-Sheet Strength & High ROE: The company enjoys ample liquidity and a low leverage level. As of Dec 31, 2021, the company had $5.5 billion in total liquidity. The company’s net leverage ratio was (0.24) as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X. Additionally, growth is expected to be further boosted by capital deployment focused on sectors and business lines that are poised to benefit considerably from secular growth trends.
Furthermore, CBRE Group’s return on equity is 24.38% compared with the industry average of 3.94%. This shows that the company reinvests more efficiently than the industry.
Estimate Revisions: The upward earnings estimate revisions trend for the current year indicates a favorable outlook for the company. The Zacks Consensus Estimate for 2022 earnings per share (EPS) has been revised 3.1% upward in a week. Given its progress on fundamentals and positive estimate revisions, the stock is likely to keep performing well in the quarters ahead.
Other Key Picks
Some other key picks from the real estate operations sector include Jones Lang LaSalle Incorporated (JLL - Free Report) , Cushman & Wakefield plc (CWK - Free Report) and eXp World Holdings, Inc. (EXPI - Free Report) .
Jones Lang LaSalle Incorporated currently sports a Zacks Rank of 1. Jones Lang LaSalle’s 2022 revenues are expected to increase 6.35% year over year.
Image: Bigstock
5 Reasons to Add CBRE Group (CBRE) to Your Portfolio Now
Shares of CBRE Group (CBRE - Free Report) have had an impressive run in the past year, appreciating 20.4% against its industry’s decline of 22.1%.
Image Source: Zacks Investment Research
In February, the company came up with better-than-expected fourth-quarter 2021 results, highlighting the benefits of diversifying across asset types, business lines, client types and geographies as well as expanding the company’s resilient business in recent years. A healthy balance sheet and a supportive macro environment also benefited CBRE Group.
Fundamentals appear solid for this Zacks Rank #1 (Strong Buy) stock. Moreover, there is enough opportunity for the stock’s price appreciation in the near term. Let’s now delve deeper into its strengths.
Reasons to Buy CBRE Group
Robust Scale: As the largest commercial real estate services and investment firm (based on 2021 revenues), CBRE enjoys a robust scale. It is among a few companies offering a full suite of services to multinational clients. Moreover, the company has grown organically and banks on strategic in-fill acquisitions to boost its service offerings and geographic reach. With an expanded capability to service, the company’s number of large clients has increased significantly over the past years. As large corporations continue to seek consolidation of the number of service providers, CBRE Group is expected to remain a beneficiary of this trend.
Diversified & Contractual Revenue Base: CBRE Group has opted for a better-balanced and more resilient business model. In pursuit of this, the company has shifted to a more diversified and contractual revenue base over the past years. This makes the company relatively resilient to market disruptions and positions it well to navigate amid headwinds. Enhanced resiliency helped its performance amid the pandemic. Though transaction revenues had been soft, the broad diversification of deal sizes and property types helped the company sail through the challenging environment. Capital allocation scopes are expected to fuel growth and boost resiliency further. Also, geographical diversity helped the company tide over muted activity in some markets with solid growth elsewhere.
Occupiers Outsourcing Business: CBRE Group’s Global Workplace Solutions (GWS) segment, which provides a broad suite of integrated, contractually-based services to occupiers of real estate, including facilities management, project management, transaction management and management consulting, is well-poised to grow. Occupiers of real estate are increasingly opting for outsourcing and depending on the expertise of third-party real estate specialists to achieve an improvement in execution and efficiency.
As a result, CBRE is witnessing continued momentum from new and existing customers. Also, a high-quality client base is bumping up contractual revenues. The new business pipeline is gaining from client and property types, which are benefiting from secular shifts hastened by the pandemic. The pipeline remains solid and well-diversified.
Balance-Sheet Strength & High ROE: The company enjoys ample liquidity and a low leverage level. As of Dec 31, 2021, the company had $5.5 billion in total liquidity. The company’s net leverage ratio was (0.24) as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X. Additionally, growth is expected to be further boosted by capital deployment focused on sectors and business lines that are poised to benefit considerably from secular growth trends.
Furthermore, CBRE Group’s return on equity is 24.38% compared with the industry average of 3.94%. This shows that the company reinvests more efficiently than the industry.
Estimate Revisions: The upward earnings estimate revisions trend for the current year indicates a favorable outlook for the company. The Zacks Consensus Estimate for 2022 earnings per share (EPS) has been revised 3.1% upward in a week. Given its progress on fundamentals and positive estimate revisions, the stock is likely to keep performing well in the quarters ahead.
Other Key Picks
Some other key picks from the real estate operations sector include Jones Lang LaSalle Incorporated (JLL - Free Report) , Cushman & Wakefield plc (CWK - Free Report) and eXp World Holdings, Inc. (EXPI - Free Report) .
Jones Lang LaSalle Incorporated currently sports a Zacks Rank of 1. Jones Lang LaSalle’s 2022 revenues are expected to increase 6.35% year over year.
The Zacks Consensus Estimate for JLL’s 2022 EPS has been revised 1.4% upward in the past week to $19.48. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cushman & Wakefield’s 2022 EPS has moved 16.9% north to $2.42 in the past month.
Cushman & Wakefield's 2022 revenues are expected to increase 16.9% year over year. Currently, CWK carries a Zacks Rank of 1.
The Zacks Consensus Estimate for eXp World Holdings’ 2022 EPS has moved 10% north to 44 cents over the past month.
Currently, eXp World Holdings carries a Zacks Rank of 2 (Buy). EXPI's 2022 revenues are expected to increase 29.4% year over year.