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Jones Lang LaSalle (JLL) Down 8.7% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Jones Lang LaSalle (JLL - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Jones Lang LaSalle due for a breakout? 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 drivers.

Jones Lang LaSalle Surpasses Q1 Earnings Estimates

JLL reported first-quarter 2019 adjusted earnings of 89 cents per share, surpassing the Zacks Consensus Estimate of 69 cents. However, the bottom-line figure compares unfavorably with the year-ago adjusted earnings of 97 cents per share.

Revenues for the reported quarter came in at around $3.8 billion, outpacing the Zacks Consensus Estimate of $3.72 billion. The reported figure improved 7%, year over year. Fee revenues were up 3% year over year to $1.3 billion.

Results highlight robust organic Real Estate Services revenue growth, aided by Leasing and Corporate Solutions segments. Further, the Americas’ segment performance and Asia-Pacific improvement helped expand margin. In addition, assets under management reached a record $64.3 billion.

Behind the Headline Numbers

During the reported quarter, JLL’s Real Estate Services revenues climbed 8% year over year to $3.7 billion. In the Americas, revenues and fee revenues came in at $2.2 billion and $711 million, respectively, indicating 16% and 14% year-over-year growth.

This was backed by growth in the leasing, reflecting momentum in the New York, Midwest and Northwest U.S. markets. Also, growth in the Property & Facility Management segment contributed to the Americas’ performance.

Revenues and fee revenues of the EMEA segment came in at $723.4 million and $316.1 million, down 8% and 10%, respectively, from the year-ago period. Results reflect declines in other service lines, primarily Capital Markets. Furthermore, service lines in the U.K. and France had the most significant decline in fee revenue.

For the Asia-Pacific segment, revenues and fee revenues came in at $748.7 million and $198.2million, respectively, marking year-over-year jump of 5% and 2%, respectively. Results highlight improved revenues from Property & Facility Management due to new client wins and expansion of client mandates.

Revenues from the LaSalle Investment Management segment recorded decline of 18% year over year to $98.4 million. Year-over-year decline in incentive fees dented revenues.

At the end of first-quarter 2019, assets under management were $64.3 billion, up 6% from $60.5 billion recorded at the end of the last quarter.

Liquidity

Jones Lang exited the reported quarter with cash and cash equivalents of $389.5 million, down from $480.9 million as of Dec 31, 2018. Moreover, the company’s net debt totaled $980.1 million at the end of first-quarter 2019, denoting an increase of $690.8 million and $70 million from Dec 31, 2018 and Mar 31, 2018, respectively.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

VGM Scores

At this time, Jones Lang LaSalle has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Jones Lang LaSalle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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