Jones Lang LaSalle Incorporated (JLL Quick QuoteJLL - Free Report) , popularly known as JLL, is likely to benefit from the continued strength of its resilient lines of business and favorable outsourcing trends. However, persistent macroeconomic uncertainty and a high interest rate environment have kept JLL’s transaction-based businesses in distress.

JLL is poised to benefit from its wide range of real estate products and services offerings, as well as extensive knowledge of domestic and international real estate markets, thus enabling it to operate as a single-source provider of real estate solutions. The company is focused on balanced revenue growth across profitable markets.

Its superior client services and strategic investment in technology and innovation are expected to help grow market share and win relationships. Strategic investments in the technology front helped the company navigate challenging times. Moreover, JLL's diversified and resilient platform and cost optimization efforts are expected to support its adjusted EBITDA. 

JLL’s Work Dynamics segment is well-positioned to benefit from favorable trends in the outsourcing business. Corporations are looking for the company’s wide-ranging knowledge and the breadth of its services, including sustainability.

In the post-pandemic period, this trend for organizations to outsource real estate services while progressively looking for strategic advice on reimagining their workspaces and workstyles to boost culture, attract talent and drive performance has gathered more strength.

Amid the rising 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 performance in the upcoming period.

JLL is focused on maintaining balance sheet strength and adequate liquidity to enjoy operational flexibility. The company exited the first quarter of 2024 with $2.3 billion of liquidity and a net leverage of 1.9X. As of Mar 31, 2024, it enjoyed investment grade ratings of Baa1 from Moody’s and BBB+ from S&P Global, which highlight financial and balance sheet strength, enabling JLL to borrow at a favorable rate. 

Shares of this Zacks Rank #2 (Buy) company have rallied 13% in the past three months, outperforming the industry’s increase of 3.7%. Also, analysts seem bullish on this stock, with the Zacks Consensus Estimate moving 1.1% upward over the past month to $12.36.

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However, macroeconomic uncertainty, geopolitical tension and their adverse impact on commercial real estate transactions weigh on JLL. Occupiers continue to adopt a cautious approach under present market circumstances, awaiting greater price discovery and causing a delay in the closing timeline for transactions. High interest rates and foreign currency fluctuations add to its woes.

Competition from other real estate service providers and institutional players on the international, regional and local ground is a concern for JLL. Also, some of them are larger on a regional or local basis or have a stronger position in a specific market segment or service offering. This could curb JLL’s ability to raise fees, affecting profitability.

Other Stocks to Consider

Some other top-ranked stocks from the real estate operations sector are Colliers International Group Inc. (CIGI Quick QuoteCIGI - Free Report) and Legacy Housing Corporation (LEGH Quick QuoteLEGH - Free Report) . While Legacy Housing sports a Zacks Rank #1 (Strong Buy), Colliers International has a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for Colliers International’s current-year EPS of $5.95 suggests an 11.2% increase year over year.    

The Zacks Consensus Estimate for Legacy Housing’s 2024 EPS has increased 12.5% upward over the past month to $2.34.