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Should You Hold on to Jones Lang LaSalle (JLL) Stock for Now?

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Jones Lang LaSalle (JLL - Free Report) offers a wide range of real estate products and services. It is well-poised to benefit from solid industry fundamentals, strategic acquisitions and a robust balance-sheet position.

JLL’s extensive knowledge of domestic and international real estate markets enables it to operate as a single-source provider of real estate solutions. This helps it to enjoy a robust scale. Its focus on balanced revenue growth across profitable markets and superior client services is likely to help it grow its market share and acquire new clients.

The company’s data-driven and experiential technology platform is providing a competitive edge and is leading to increased client engagements, which is encouraging.

Moreover, with the increasing trend of outsourcing real estate needs by companies, new contract wins and the expansion of services with existing clients are likely to aid JLL’s Work Dynamics segment’s performance.

To enhance its global growth strategy and expand its capabilities in certain service offerings, JLL has been making strategic acquisitions. In 2022, it closed business acquisitions worth $23.8 million.

JLL enjoys a robust balance-sheet position with ample liquidity. As of Dec 31, 2022, it had $2.6 billion of corporate liquidity and a net leverage ratio of 1.0. Also, its investment-grade credit ratings give it favorable access to the debt market. Such strong financial footing aids its expansion efforts and poises it well to sail through challenging times.

In addition, JLL’s trailing 12-month return on equity (ROE) is 12.55% compared with the industry’s average of 1.36%.

The Zacks Rank #3 (Hold) stock has lost 11% compared with the industry’s decline of 22.3% in the past six months.

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Nonetheless, rising interest rates have led clients to adopt a cautious approach, with many capital sources tightening their underwriting standards. Also, investors’ desire for greater price discovery is causing a delay in the closing timeline for transactions. These factors are expected to adversely impact JLL’s transaction-based businesses in the near term.

JLL’s extensive international presence makes it susceptible to unfavorable foreign currency movement, rising geopolitical tension and uneasiness in some economies. This could adversely impact the company’s top line and impede growth to a certain extent.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Alexandria Real Estate Equities (ARE - Free Report) , Terreno Realty (TRNO - Free Report) , each currently carrying a Zacks Rank #2 (Buy) and Service Properties Trust (SVC - Free Report) , currently carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Alexandria Real Estate’s 2023 funds from operations (FFO) per share stands at $8.95.

The Zacks Consensus Estimate for Terreno Realty’s current-year FFO per share is pegged at $2.17.

The Zacks Consensus Estimate for Service Properties Trust’s 2023 FFO per share is pegged at $1.89.

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