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Key Reasons to Add CBRE Group (CBRE) to Your Portfolio Now
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CBRE Group’s (CBRE - Free Report) wide array of real estate products and service offerings and healthy outsourcing business position it well for growth. Its solid balance sheet position also bodes well.
Last month, this Dallas, TX-based real estate came up with better-than-expected second-quarter 2024 results. The company reported core earnings per share (EPS) of 81 cents, surpassing the Zacks Consensus Estimate of 69 cents. The results reflected growth in its resilient lines of business.
Shares of this Zacks Rank #2 (Buy) company have rallied 22.4% over the past three months against the industry’s decline of 0.5%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make CBRE Group a Solid Pick
Market-leading position: 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.
Diverse Revenue Base: 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.
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.
Further, with significant growth from large first-generation outsourcers, the GWS business pipeline remains elevated, offering CBRE Group scope for growth.
In the second quarter of 2024, the GWS segment’s net revenues rose 16%. GWS delivered strong business wins with a healthy balance of new clients and expansions in the quarter. Management expects mid-teen net revenue growth for the segment in 2024.
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. Moreover, the company opts for larger, transformational deals driven by macro policies.
In June 2024, CBRE Group acquired Direct Line Global, a premier provider of mission-critical data center infrastructure, from a private equity firm, Guardian Capital. The acquisition is expected to be immediately accretive to CBRE’s core earnings per share (EPS).
In the second quarter of 2024, CBRE completed five in-fill business acquisitions, including one in the Advisory Services segment and four in the GWS segment, for approximately $290.9 million in cash and non-cash consideration.
These opportunistic acquisitions and strategic investments will likely 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. In fact, strategic reinvestment in its business, specifically on the technology front, is expected to differentiate CBRE Group from its peers.
Balance Sheet Strength: CBRE had $3.7 billion in total liquidity as of Jun 30, 2024. The company’s net leverage ratio was 1.58 as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X. With ample financial flexibility, CBRE is well-positioned to capitalize on growth opportunities.
Its trailing 12-month return on equity is 12.74% compared with the industry’s average of negative 0.78%. 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 operations real estate sector are Bridge Investment Group (BRDG - Free Report) and Newmark Group (NMRK - Free Report) , each carrying a Zacks Rank #2 at present.
Image: Bigstock
Key Reasons to Add CBRE Group (CBRE) to Your Portfolio Now
CBRE Group’s (CBRE - Free Report) wide array of real estate products and service offerings and healthy outsourcing business position it well for growth. Its solid balance sheet position also bodes well.
Last month, this Dallas, TX-based real estate came up with better-than-expected second-quarter 2024 results. The company reported core earnings per share (EPS) of 81 cents, surpassing the Zacks Consensus Estimate of 69 cents. The results reflected growth in its resilient lines of business.
Shares of this Zacks Rank #2 (Buy) company have rallied 22.4% over the past three months against the industry’s decline of 0.5%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make CBRE Group a Solid Pick
Market-leading position: 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.
Diverse Revenue Base: 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.
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.
Further, with significant growth from large first-generation outsourcers, the GWS business pipeline remains elevated, offering CBRE Group scope for growth.
In the second quarter of 2024, the GWS segment’s net revenues rose 16%. GWS delivered strong business wins with a healthy balance of new clients and expansions in the quarter. Management expects mid-teen net revenue growth for the segment in 2024.
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. Moreover, the company opts for larger, transformational deals driven by macro policies.
In June 2024, CBRE Group acquired Direct Line Global, a premier provider of mission-critical data center infrastructure, from a private equity firm, Guardian Capital. The acquisition is expected to be immediately accretive to CBRE’s core earnings per share (EPS).
In the second quarter of 2024, CBRE completed five in-fill business acquisitions, including one in the Advisory Services segment and four in the GWS segment, for approximately $290.9 million in cash and non-cash consideration.
These opportunistic acquisitions and strategic investments will likely 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. In fact, strategic reinvestment in its business, specifically on the technology front, is expected to differentiate CBRE Group from its peers.
Balance Sheet Strength: CBRE had $3.7 billion in total liquidity as of Jun 30, 2024. The company’s net leverage ratio was 1.58 as of the same date. This is significantly less than CBRE’s primary debt covenant of 4.25X. With ample financial flexibility, CBRE is well-positioned to capitalize on growth opportunities.
Its trailing 12-month return on equity is 12.74% compared with the industry’s average of negative 0.78%. 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 operations real estate sector are Bridge Investment Group (BRDG - Free Report) and Newmark Group (NMRK - Free Report) , each carrying a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Bridge’s current-year EPS of 80 cents suggests an increase of 6.7% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Newmark’s 2024 EPS of $1.15 indicates a projected rise of 9.5% year over year.