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Jones Lang LaSalle (JLL) Up 4.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Jones Lang LaSalle (JLL - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jones Lang LaSalle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Jones Lang's Q4 Earnings & Revenues Beat Estimates
JLL reported fourth-quarter 2023 adjusted EPS of $4.23, beating the Zacks Consensus Estimate of $3.70. The reported figure, however, declined 3% from the prior-year quarter.
Results reflect better-than-anticipated revenues. The company benefited from the continued strength in its resilient lines of business. However, transaction-based businesses, specifically the Capital Markets, were hit by higher interest rates and rapid changes in the economic sentiment globally.
Revenues of $5.88 billion increased 4.9% from the year-ago quarter’s $5.60 billion and surpassed the Zacks Consensus Estimate of $5.68 billion.
The quarterly adjusted EBITDA margin dipped 120 basis points to 14.1% (USD) from the prior-year period. Lower transaction-based revenues, higher equity losses and timing of incentive compensation accruals led to this fall, which was partially offset by the resilient revenue growth, the benefit received from recent cost reduction actions and an actuarial benefit associated with U.S. medical self-insurance.
Per Christian Ulbrich, CEO of JLL, “JLL's fourth-quarter and full-year 2023 operating results reflected strong growth within our resilient business lines in the face of the market-wide pullback in transaction activity and elevated geopolitical uncertainty. With a focus on operating efficiency, we drove improved cash generation while continuing to invest in our platform.”
Segment-Wise Performances
During the fourth quarter, the Markets Advisory segment’s revenues and fee revenues came in at $1.20 billion and $895.6 million, respectively, reflecting a year-over-year gain of 1% (in USD) in the segment’s revenues but a fall of 2% in fee revenues. The decline in fee revenues was mainly due to the Leasing segment’s underperformance amid continued economic uncertainty, which has delayed commercial real estate decision-making, particularly for large-scale leasing actions.
Revenues and fee revenues for the Capital Markets segment were $537.1 million and $532.2 million, respectively, decreasing 11.6% and 11.1% (in USD) year over year. The fall was mainly due to muted transaction volume compared with 2022 due to the rapid rise in interest rates and elevated economic uncertainty. This chiefly affected JLL’s Investment Sales and Debt/Equity Advisory businesses across most asset classes and regions compared with the prior-year quarter.
JLL’s Work Dynamics segment reported revenues and fee revenues of $3.97 billion and $582.2 million, respectively, up 9.1% and 9% (in USD) year over year. The uptick in revenues and fee growth was broad-based across service lines and geographies. Momentum from increased project demand drove strong Project Management results, while an increase in recent wins and mandate expansions in the second half of the year aided Workplace Management’s growth.
JLL Technologies segment reported revenues and fee revenues of $65.5 million and $62 million, respectively, rising 14.3% and 14.4% (in USD) from the prior-year quarter levels. The growth in solutions and service offerings, largely from existing enterprise clients, supported the uptick.
The revenues and fee revenues in the LaSalle segment fell 2.9% and 2.7% (in USD) year over year to $115.3 million and $108.4 million, respectively. The decline in revenues was mainly due to advisory fees, as lower asset valuations over the past twelve months impacted assets under management. Lower transaction fees reflected the global trends of dampened investment sales transaction volumes.
As of Dec 31, 2023, LaSalle had $73.9 billion of real estate AUM, down from $77.7 billion as of Sep 30, 2023. This resulted from decreases in net valuation and foreign currency and dispositions and withdrawals, partially offset by the rise in acquisitions.
Balance Sheet
JLL exited the fourth quarter with cash and cash equivalents of $410 million, up from $389.5 million as of Sep 30, 2023.
As of Dec 31, 2023, the net leverage ratio was 1.6, down from 2.2 as of Sep 30, 2023, but up from 1.0 as of Dec 31, 2022. The corporate liquidity was $3.1 billion as of the fourth quarter's end.
The company repurchased 147,805 shares during the reported quarter for $21.9 million. As of Dec 31, 2023, $1.093.6 billion remained authorized for repurchase under the share repurchase program.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 6.62% due to these changes.
VGM Scores
At this time, Jones Lang LaSalle has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Jones Lang LaSalle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Jones Lang LaSalle belongs to the Zacks Real Estate - Operations industry. Another stock from the same industry, CBRE Group (CBRE - Free Report) , has gained 6.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CBRE reported revenues of $8.95 billion in the last reported quarter, representing a year-over-year change of +9.2%. EPS of $1.38 for the same period compares with $1.33 a year ago.
CBRE is expected to post earnings of $0.71 per share for the current quarter, representing a year-over-year change of -22.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.1%.
CBRE has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Jones Lang LaSalle (JLL) Up 4.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Jones Lang LaSalle (JLL - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jones Lang LaSalle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Jones Lang's Q4 Earnings & Revenues Beat Estimates
JLL reported fourth-quarter 2023 adjusted EPS of $4.23, beating the Zacks Consensus Estimate of $3.70. The reported figure, however, declined 3% from the prior-year quarter.
Results reflect better-than-anticipated revenues. The company benefited from the continued strength in its resilient lines of business. However, transaction-based businesses, specifically the Capital Markets, were hit by higher interest rates and rapid changes in the economic sentiment globally.
Revenues of $5.88 billion increased 4.9% from the year-ago quarter’s $5.60 billion and surpassed the Zacks Consensus Estimate of $5.68 billion.
The quarterly adjusted EBITDA margin dipped 120 basis points to 14.1% (USD) from the prior-year period. Lower transaction-based revenues, higher equity losses and timing of incentive compensation accruals led to this fall, which was partially offset by the resilient revenue growth, the benefit received from recent cost reduction actions and an actuarial benefit associated with U.S. medical self-insurance.
Per Christian Ulbrich, CEO of JLL, “JLL's fourth-quarter and full-year 2023 operating results reflected strong growth within our resilient business lines in the face of the market-wide pullback in transaction activity and elevated geopolitical uncertainty. With a focus on operating efficiency, we drove improved cash generation while continuing to invest in our platform.”
Segment-Wise Performances
During the fourth quarter, the Markets Advisory segment’s revenues and fee revenues came in at $1.20 billion and $895.6 million, respectively, reflecting a year-over-year gain of 1% (in USD) in the segment’s revenues but a fall of 2% in fee revenues. The decline in fee revenues was mainly due to the Leasing segment’s underperformance amid continued economic uncertainty, which has delayed commercial real estate decision-making, particularly for large-scale leasing actions.
Revenues and fee revenues for the Capital Markets segment were $537.1 million and $532.2 million, respectively, decreasing 11.6% and 11.1% (in USD) year over year. The fall was mainly due to muted transaction volume compared with 2022 due to the rapid rise in interest rates and elevated economic uncertainty. This chiefly affected JLL’s Investment Sales and Debt/Equity Advisory businesses across most asset classes and regions compared with the prior-year quarter.
JLL’s Work Dynamics segment reported revenues and fee revenues of $3.97 billion and $582.2 million, respectively, up 9.1% and 9% (in USD) year over year. The uptick in revenues and fee growth was broad-based across service lines and geographies. Momentum from increased project demand drove strong Project Management results, while an increase in recent wins and mandate expansions in the second half of the year aided Workplace Management’s growth.
JLL Technologies segment reported revenues and fee revenues of $65.5 million and $62 million, respectively, rising 14.3% and 14.4% (in USD) from the prior-year quarter levels. The growth in solutions and service offerings, largely from existing enterprise clients, supported the uptick.
The revenues and fee revenues in the LaSalle segment fell 2.9% and 2.7% (in USD) year over year to $115.3 million and $108.4 million, respectively. The decline in revenues was mainly due to advisory fees, as lower asset valuations over the past twelve months impacted assets under management. Lower transaction fees reflected the global trends of dampened investment sales transaction volumes.
As of Dec 31, 2023, LaSalle had $73.9 billion of real estate AUM, down from $77.7 billion as of Sep 30, 2023. This resulted from decreases in net valuation and foreign currency and dispositions and withdrawals, partially offset by the rise in acquisitions.
Balance Sheet
JLL exited the fourth quarter with cash and cash equivalents of $410 million, up from $389.5 million as of Sep 30, 2023.
As of Dec 31, 2023, the net leverage ratio was 1.6, down from 2.2 as of Sep 30, 2023, but up from 1.0 as of Dec 31, 2022. The corporate liquidity was $3.1 billion as of the fourth quarter's end.
The company repurchased 147,805 shares during the reported quarter for $21.9 million. As of Dec 31, 2023, $1.093.6 billion remained authorized for repurchase under the share repurchase program.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 6.62% due to these changes.
VGM Scores
At this time, Jones Lang LaSalle has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Jones Lang LaSalle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Jones Lang LaSalle belongs to the Zacks Real Estate - Operations industry. Another stock from the same industry, CBRE Group (CBRE - Free Report) , has gained 6.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CBRE reported revenues of $8.95 billion in the last reported quarter, representing a year-over-year change of +9.2%. EPS of $1.38 for the same period compares with $1.33 a year ago.
CBRE is expected to post earnings of $0.71 per share for the current quarter, representing a year-over-year change of -22.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.1%.
CBRE has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.