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Can Jones Lang Brave Low Leasing and Investment Sales?
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Jones Lang LaSalle Inc. (JLL - Free Report) — popularly known as JLL — has a broad range of real estate product and services as well as an extensive knowledge of domestic and international real estate markets. The company is focused on balanced revenue growth across potential markets. Also, JLL's superior client services, and investments in technology and innovation are likely to help grow its market share and win relationships.
However, the coronavirus pandemic has resulted in significant amounts of uncertainty, interruption of business activity, and impact on global markets and consumer and business sentiment.
For JLL, the pandemic’s macroeconomic impact resulted in certain non-cash charges in the first quarter, including a $30.6-million increase to loan loss credit reserves in the Americas and $40.3 million of equity losses from fair value declines in LaSalle. However, continued progress on the HFF Inc. integration resulted in solid Capital Markets performance, while double-digit increase in facilities management aided Corporate Solutions.
Concurrent with the first-quarter earnings, the company announced that its board has decided not to announce a semi-annual dividend, generally paid in June. Moreover, JLL has suspended its share-repurchase activity.
In the second quarter, business contraction is likely. Investment in global commercial real estate declined 5% in the March-end quarter, while global leasing volumes fell 22%, with deals on hold and in flux. Depending on recovery, volumes for the rest of the year will likely be affected. Therefore, the continued impact of the outbreak on transactional-based service lines, chances of additional non-cash charges, and possibilities of delays in payments from clients are key concerns.
Shares of this Zacks Rank #5 (Strong Sell) company have declined 8.1% over the past year compared with the industry’s loss of 1.5%.
The recent trend in earnings estimate revisions for the ongoing year does not indicate a favorable outlook for JLL as the Zacks Consensus Estimate for earnings per share moved south in two months’ time.
Nevertheless, JLL’s Corporate Solutions business, which is the company’s multi-service outsourcing business, is well poised to capitalize on the favorable trends. In fact, amid rising trend of outsourcing of real estate needs by companies, new contract awards and expansion of services with existing clients are likely to aid JLL’s performance in the upcoming period. The company enjoys a robust scale and healthy outsourcing business and is among the few companies, along with CBRE Group (CBRE - Free Report) , offering a vast suite of services to clients.
JLL is focused on maintaining its balance-sheet strength and adequate liquidity to enjoy operational flexibility. The company enjoys credit facility of $2.75 billion that will mature in 2023. Net debt-to-trailing 12 months adjusted EBITDA was 1.4x and the company has no debt maturities until 2022. Although there was an uptick in leverage in the first quarter, it reflects seasonal liquidity needs and particularly, annual incentive compensation payments. Moreover, the company enjoys investment grade ratings — Moody’s: Baa1 and S&P: BBB+ — which reflects healthy balance-sheet strength. Hence, with a solid balance sheet and sufficient financial flexibility, JLL remains well poised to sail through the challenging times and capitalize on the solid opportunities.
Consolidated-Tomoka Land Co.’s (CTO - Free Report) current-quarter consensus EPS estimate moved to 84 cents from 26 cents in two months’ time. It sports a Zacks Rank of 1, currently.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Can Jones Lang Brave Low Leasing and Investment Sales?
Jones Lang LaSalle Inc. (JLL - Free Report) — popularly known as JLL — has a broad range of real estate product and services as well as an extensive knowledge of domestic and international real estate markets. The company is focused on balanced revenue growth across potential markets. Also, JLL's superior client services, and investments in technology and innovation are likely to help grow its market share and win relationships.
However, the coronavirus pandemic has resulted in significant amounts of uncertainty, interruption of business activity, and impact on global markets and consumer and business sentiment.
For JLL, the pandemic’s macroeconomic impact resulted in certain non-cash charges in the first quarter, including a $30.6-million increase to loan loss credit reserves in the Americas and $40.3 million of equity losses from fair value declines in LaSalle. However, continued progress on the HFF Inc. integration resulted in solid Capital Markets performance, while double-digit increase in facilities management aided Corporate Solutions.
Concurrent with the first-quarter earnings, the company announced that its board has decided not to announce a semi-annual dividend, generally paid in June. Moreover, JLL has suspended its share-repurchase activity.
In the second quarter, business contraction is likely. Investment in global commercial real estate declined 5% in the March-end quarter, while global leasing volumes fell 22%, with deals on hold and in flux. Depending on recovery, volumes for the rest of the year will likely be affected. Therefore, the continued impact of the outbreak on transactional-based service lines, chances of additional non-cash charges, and possibilities of delays in payments from clients are key concerns.
Shares of this Zacks Rank #5 (Strong Sell) company have declined 8.1% over the past year compared with the industry’s loss of 1.5%.
The recent trend in earnings estimate revisions for the ongoing year does not indicate a favorable outlook for JLL as the Zacks Consensus Estimate for earnings per share moved south in two months’ time.
Nevertheless, JLL’s Corporate Solutions business, which is the company’s multi-service outsourcing business, is well poised to capitalize on the favorable trends. In fact, amid rising trend of outsourcing of real estate needs by companies, new contract awards and expansion of services with existing clients are likely to aid JLL’s performance in the upcoming period. The company enjoys a robust scale and healthy outsourcing business and is among the few companies, along with CBRE Group (CBRE - Free Report) , offering a vast suite of services to clients.
JLL is focused on maintaining its balance-sheet strength and adequate liquidity to enjoy operational flexibility. The company enjoys credit facility of $2.75 billion that will mature in 2023. Net debt-to-trailing 12 months adjusted EBITDA was 1.4x and the company has no debt maturities until 2022. Although there was an uptick in leverage in the first quarter, it reflects seasonal liquidity needs and particularly, annual incentive compensation payments. Moreover, the company enjoys investment grade ratings — Moody’s: Baa1 and S&P: BBB+ — which reflects healthy balance-sheet strength. Hence, with a solid balance sheet and sufficient financial flexibility, JLL remains well poised to sail through the challenging times and capitalize on the solid opportunities.
Stocks to Consider
Exp World Holdings, Inc.’s (EXPI - Free Report) Zacks Consensus Estimate for 2020 EPS has been revised upward to 11 cents from 1 cent over the past two months. The stock currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consolidated-Tomoka Land Co.’s (CTO - Free Report) current-quarter consensus EPS estimate moved to 84 cents from 26 cents in two months’ time. It sports a Zacks Rank of 1, currently.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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