5 Reasons to Add CBRE Group Stock to Your Portfolio Now

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CBRE Group’s CBRE wide array of real estate products and services offerings, healthy outsourcing business, strategic buyouts, technology investments and solid balance sheet are expected to drive its performance.

In October, CBRE Group reported third-quarter 2024 core earnings per share (EPS) of $1.20, ahead of the Zacks Consensus Estimate of $1.06. The reported figure also increased 66.7% year over year. Results reflected double-digit revenue and segment operating profit growth, with significant operating leverage in Advisory Services, Global Workplace Solutions (“GWS”), and Real Estate Investments business segments.

The company expects a strong fourth quarter across all three segments and increased its 2024 core EPS outlook. For 2024, CBRE projects its core EPS in the range of $4.95-$5.05, up from the previously guided range of $4.70-$4.90.

Analysts also seem bullish on this stock, with the Zacks Consensus Estimate for CBRE Group’s current-year earnings per share (EPS) being revised 2.1% upward over the past three months to $4.90.

Shares of this Zacks Rank #2 (Buy) company have rallied 22.7% over the past three months, outperforming its industry’s growth of 14.1%. Given the strength of its fundamentals, there seems to be additional room for growth of this stock.

Factors That Make CBRE Group a Solid Pick

Market-Leading Position & Resilient Business Model: CBRE, the largest commercial real estate services and investment firm (based on 2023 revenues), holds extensive knowledge of domestic and international real estate markets. This helps it enjoy a robust scale. A market-leading position gives it a competitive edge in navigating through any challenging situations and capitalizing on compelling opportunities.

Over the past few years, CBRE has opted for a better-balanced and more resilient business model. In pursuit of this, the company has shifted toward a more diversified and contractual revenue base, which enables it to tide over market disruptions and other economic uncertainties. Third-quarter 2024 revenues were up 14.8% year over year to $9.04 billion, and this trend is expected to continue.

GWS Segment Growth: With occupiers of real estate increasingly opting for outsourcing and relying on the expertise of third-party real estate specialists to optimize their operations, CBRE Group’s Global Workplace Solutions (“GWS”) segment is well-placed to benefit. With first-generation outsourcing wins and existing contract expansions, the GWS business is well-poised for growth. The GWS segment registered a year-over-year increase of 12.3% (13% in local currency) in revenues to $6.35 billion, and this positive momentum is anticipated to continue.

Strategic Acquisitions: To widen its global reach and expand and reinforce its service offerings, CBRE Group has been focusing on strategic in-fill acquisitions by acquiring regional or specialty firms and independent affiliates. The company opts for larger, transformational deals driven by macro policies. In the first quarter of 2024, the company acquired J&J Worldwide Services, a leading provider of engineering services, base support operations and facilities maintenance for the U.S. federal government.

In the first nine months of 2024, CBRE Group completed six in-fill business acquisitions, including two in the Advisory Services segment and four in the GWS segment, with an aggregate purchase price of approximately $295 million in cash and non-cash consideration. These opportunistic acquisitions and strategic investments are likely to serve as growth drivers, supplementing its organic growth.

Solid Technology Platform: The company’s technology platform helps it develop and deliver superior analytical, research and client service tools to meet diverse client needs. Strategic reinvestment in its business, specifically on the technology front, is expected to differentiate CBRE Group from its peers. CBRE has also gained from its cost-cutting efforts and benefited from operational efficiencies, and this trend is expected to continue in the near term. Core EBITDA rose 57.8% (58.9% in local currency) to $688 million in the third quarter. We expect this positive trend to continue.

Balance Sheet Strength: CBRE had $4 billion in total liquidity as of Sept. 30, 2024. The company’s net leverage ratio was 1.26 as of the same date, significantly less than CBRE’s primary debt covenant of 4.25. With ample financial flexibility, CBRE is well-positioned to capitalize on growth opportunities. Its trailing 12-month return on equity is 13.91% compared with the industry’s average of 1.54%. This indicates that the company is more efficient in using shareholders’ funds than its peers.

Other Stocks to Consider

Some other top-ranked stocks from the real estate operations sector are Jones Lang LaSalle Incorporated JLL and FirstService Corporation FSV. Jones Lang LaSalle and FirstService Corporation each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimate for Jones Lang LaSalle’s 2024 earnings per share (EPS) has increased 1.4% over the past two months to $13.17.

The Zacks Consensus Estimate for FirstService Corporation’s current-year EPS of $4.99 indicates a 4.2% rise year over year.

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Jll Income Property Trust Sponsor Jll Commits $100 Million Equity Investment

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Jones Lang LaSalle

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Jones Lang LaSalle Incorporated (JLL) Soars to 52-Week High, Time to Cash Out?

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Have you been paying attention to shares of Jones Lang LaSalle (JLL)? Shares have been on the move with the stock up 0.4% over the past month. The stock hit a new 52-week high of $288.5 in the previous session. Jones Lang LaSalle has gained 38.8% since the start of the year compared to the 24.1% move for the Zacks Finance sector and the 18.3% return for the Zacks Real Estate - Operations industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 6, 2024, Jones Lang LaSalle reported EPS of $3.5 versus consensus estimate of $2.67 while it beat the consensus revenue estimate by 4.94%.

For the current fiscal year, Jones Lang LaSalle is expected to post earnings of $12.65 per share on $22.82 billion in revenues. This represents a 70.95% change in EPS on a 9.94% change in revenues. For the next fiscal year, the company is expected to earn $16.25 per share on $24.54 billion in revenues. This represents a year-over-year change of 28.52% and 7.52%, respectively.

Valuation Metrics

Jones Lang LaSalle may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Jones Lang LaSalle has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 20.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 15X. On a trailing cash flow basis, the stock currently trades at 18.5X versus its peer group's average of 14.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Jones Lang LaSalle currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Jones Lang LaSalle meets the list of requirements. Thus, it seems as though Jones Lang LaSalle shares could have a bit more room to run in the near term.

How Does JLL Stack Up to the Competition?

Shares of JLL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is FirstService Corporation (FSV). FSV has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.

Earnings were strong last quarter. FirstService Corporation beat our consensus estimate by 13.99%, and for the current fiscal year, FSV is expected to post earnings of $5.58 per share on revenue of $5.18 billion.

Shares of FirstService Corporation have gained 0.8% over the past month, and currently trade at a forward P/E of 37.35X and a P/CF of 30.4X.

The Real Estate - Operations industry may rank in the bottom 54% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for JLL and FSV, even beyond their own solid fundamental situation.

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Jones Lang LaSalle (JLL) Beats Q3 Earnings and Revenue Estimates

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Jones Lang LaSalle (JLL) came out with quarterly earnings of $3.50 per share, beating the Zacks Consensus Estimate of $2.67 per share. This compares to earnings of $2.01 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 31.09%. A quarter ago, it was expected that this financial and professional services company would post earnings of $2.30 per share when it actually produced earnings of $2.55, delivering a surprise of 10.87%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Jones Lang LaSalle, which belongs to the Zacks Real Estate - Operations industry, posted revenues of $5.87 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 4.94%. This compares to year-ago revenues of $5.11 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Jones Lang LaSalle shares have added about 48.2% since the beginning of the year versus the S&P 500's gain of 21.2%.

What's Next for Jones Lang LaSalle?

While Jones Lang LaSalle has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Jones Lang LaSalle: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $5.58 on $6.38 billion in revenues for the coming quarter and $12.59 on $22.72 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Real Estate - Operations is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, eXp World Holdings (EXPI), has yet to report results for the quarter ended September 2024. The results are expected to be released on November 7.

This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +500%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

eXp World Holdings' revenues are expected to be $1.31 billion, up 7.7% from the year-ago quarter.

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Beat the Market the Zacks Way: Bank of New York Mellon, PetMed, Ulta Beauty in Focus

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FactSet Research Systems

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The three major U.S. indexes — the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average — have declined 2.1%, 1.9%, and 1.4%, respectively, since October 28. A cautious approach ahead of the U.S. presidential election has pushed the markets into negative territory.

The Labor Department reported that the U.S. economy added only 12,000 jobs in October, reaching its lowest point in three and a half years. Although unemployment remained steady at 4.1%, weak jobs data have raised fresh concerns about the economy’s health among market participants.

Gross domestic product grew at 2.8% annually in Q3. Consumer spending, which holds more than two-thirds of economic activity, rose 3.7% annually, the highest since the first quarter of 2023. Inflation remains under check as the personal consumption expenditures (PCE) index for September came in at 2.1% annually, closer to the Federal Reserve's 2% target. The CME FedWatch Tool indicates a 100% probability of another rate cut in the upcoming Federal Open Market Committee (FOMC) meeting on November 7.

On the global front, rising tensions between Iran and Israel have flared up worries about global supply-chain disruption and impact on oil prices.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.

As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.

Here are some of our key achievements:

Bank of New York Mellon and Parker-Hannifin Following Zacks Rank Upgrade

Shares of Bank of New York Mellon Corporation BK have gained 10.6% (versus the S&P 500’s 1% increase) since it was upgraded to a Zacks Rank #2 (Buy) on September 3.

Another stock, Parker-Hannifin Corporation PH, which was also upgraded to a Zacks Rank #2 on September 2, has returned 6.3% (versus the S&P 500’s 1% rise) since then.

Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +14% in the year-to-date period through October 7, 2024, vs. +22.2% for the S&P 500 index and +12.4% for the equal-weight version of the S&P 500 index.

This hypothetical portfolio returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index.

The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks since late 2022.

The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by almost 13 percentage points since 1988 (Through October 7, 2024, the Zacks # 1 Rank stocks generated an annualized average return of +24.1% since 1988 vs. +11.2% for the S&P 500 index).

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Check Bank of New York Mellon’ historical EPS and Sales here>>>

Check Parker-Hannifin’s historical EPS and Sales here>>>

Zacks Recommendation Upgrades Ubiquiti and PetMed Express

Shares of Ubiquiti Inc. UI and PetMed Express, Inc. PETS have advanced 36.8% (versus the S&P 500’s 3.8% increase) and 28.7% (versus the S&P 500’s 4.2% rise), since their Zacks Recommendation was upgraded to Outperform on September 11 and September 10, respectively.

While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.

The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.

To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>

Zacks Focus List Stocks Cbre, Ulta Beauty Shoot Up

Shares of Cbre Group Inc. CBRE, which belongs to the Zacks Focus List, have gained 21.9% over the past 12 weeks. The stock was added to the Focus List on March 13, 2017. Another Focus-List holding, Ulta Beauty, Inc. ULTA, which was added to the portfolio on March 25, 2020, has returned 19.8% over the past 12 weeks. The S&P 500 has advanced 9% over this period.

The Focus List portfolio returned +19.7% in 2024 (through September 30th) vs. +22.1% for the S&P 500 index and +15.2% for the equal-weight S&P 500 index.

The 50-stock Zacks Focus List model portfolio returned +31.44% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.

Since 2004, the Focus List portfolio has produced an annualized return of +11.9% (through September 30, 2024). This compares to a +10.4% annualized return for the S&P 500 index and +10.3% for the equal-weight version of the index in the same time period.

Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>

Zacks ECAP Stocks Monster Beverage & FactSet Research Systems Make Significant Gains

Monster Beverage Corporation MNST, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 17.8% over the past 12 weeks. FactSet Research Systems Inc. FDS has followed Monster Beverage Corporation with 16.3% returns.

The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned +1.97% for September 2024 vs. the S&P 500 index’s +2.14% return (IVV ETF).

For the year-to-date period (through the end of September 2024), the portfolio returned +20.62% vs. +22.1% for the S&P 500 index.

In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.

With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.

The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.

Zacks ECDP Stocks Clorox and Home Depot Outperform Peers

The Clorox Company CLX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.6% over the past 12 weeks. Another ECDP stock, The Home Depot, Inc. HD, has also climbed 14.4% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.

Check Clorox's dividend history here>>>

Check Home Depot‘s dividend history here>>>

With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.

The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +1.91% in September 2024 vs. the S&P 500 index’s +2.14% gain and the Dividend Aristocrats ETF’s (NOBL) +2.37%.

For the year-to-date period (through September 30th), the portfolio returned +15.85% vs. +22.1% for the S&P 500 index and +13.78% for NOBL.

The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.

Click here to access this portfolio on Zacks Advisor Tools.

Zacks Top 10 Stocks Stride Delivers Solid Returns

Stride, Inc. LRN, from the Zacks Top 10 Stocks for 2024, has jumped 57.3% year to date, which compares to the S&P 500 index’s +19.9% increase.

The Top 10 portfolio returned +40.9% this year through September 30th, vs. +22.1% for the S&P 500 index and +15.2% for the equal-weight version of the index.

The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.

Since 2012, the Top 10 portfolio has produced a cumulative return of +1,714.9% through September 30th, 2024, vs. +448.6% for the S&P 500 index. The portfolio has produced an average return of +25.5% in the period 2012 through September 30th, 2024, vs. +14.4% for the S&P 500 index and +12.7% for the equal-weight version of the index.

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