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Is CBRE Group's (CBG) Q4 Earnings Likely to Disappoint?

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CBRE Group, Inc. is slated to report fourth-quarter 2016 results on Feb 10, before the market opens. Last quarter, this commercial real estate services and investment firm delivered a 4.17% positive earnings surprise.

CBRE beat estimates in all of the trailing four quarters, with a positive average surprise of 4.44%.

Let’s see how things are shaping up for this announcement.

CBRE Group, Inc. Price and EPS Surprise
 

CBRE Group, Inc. Price and EPS Surprise | CBRE Group, Inc. Quote

Factors to Consider

Operations of CBRE are spread over several countries across the globe. Uneasiness in certain global economies is likely to impact the company’s business. In fact, the recent referendum by the Britons to stay out of the European Union is likely to hit the company’s business adversely as it has substantial exposure to that region.

Further, unfavorable foreign currency movements and stiff competition from international, regional and local players remain major concerns.

However, strategic in-fill acquisitions play a key role in expanding the geographic coverage and boosting the service offerings of the company. Also, it opts for larger, transformational deals driven by macro policies, which serve as growth drivers.

CBRE’s activities during the quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for the fourth quarter remained unchanged over the past 30 days.

Earnings Whispers

Our proven model does not conclusively show that CBRE will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. However, that is not the case here as you will see below.
   
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at 79 cents, which translates into an Earnings ESP of 0.00%.

Zacks Rank: CBRE has a Zacks Rank #4 (Sell).

As it is we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some REITs that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

CubeSmart (CUBE - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.70% and a Zacks Rank #3.

STAG Industrial, Inc. (STAG - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.50% and a Zacks Rank #3.

Chesapeake Lodging Trust , expected to release earnings results on Feb 22, has an Earnings ESP of + 2.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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