Should You Add CBRE Group (CBG) to Your Portfolio Now?
We have updated our research report on CBRE Group Inc. CBG on Aug 17, 2015.
Late last month, CBRE Group reported second-quarter 2015 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate by a penny. Earnings also came in above the prior-year quarter’s adjusted figure of 36 cents. Solid top-line growth primarily aided results.
Revenues were nearly $2.4 billion, up 12% year over year and surpassed the Zacks Consensus Estimate of $2.31 billion. Fee revenues were also up 12% to $1.8 billion.
Earlier this month, CBRE Group announced the acquisition of PKF Consulting Inc. (PKF Canada). Notably, CBRE had acquired PKF Consulting USA in Jul 2014 and the recent transaction is a follow-up. PKF Canada has offices in Toronto and Vancouver, and caters to various clients in the country, including hotel owners and operators, financial institutions and real estate developers, investors, product and service providers, and governmental agencies. This buyout is expected to be accretive to CBRE Group’s earnings, going forward.
Importantly, strategic in-fill acquisitions have played a vital role in enhancing CBRE’s geographic coverage as well as broadening and strengthening its service offerings. The company has also opted for larger, transformational deals driven by macro policies. As market conditions continue to improve, we believe that synergistic acquisitions would serve as growth drivers, supplementing the company’s organic growth.
Though uneasiness in certain global economies and unfavorable foreign currency movement remain as concerns, we believe the company has the potential to drive growth on the back of improving leasing, property sales and outsourcing business.
Over the past 30 days, the Zacks Consensus Estimate for the stock has moved up around 0.5% to $1.98 for 2015. Currently, CBRE carries a Zacks Rank #2 (Buy).
Other Key Picks from the Sector
Investors interested in the real estate industry may also consider stocks like HFF, Inc. HF, Jones Lang LaSalle Incorporated JLL and Marcus & Millichap, Inc. MMI. While HFF sports a Zaks Rank #1 (Strong Buy), Jones Lang and Marcus & Millichap hold the same rank as CBRE.
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JONES LANG LASL (JLL): Free Stock Analysis Report
CBRE GROUP INC (CBG): Free Stock Analysis Report
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HFF INC-A (HF): Free Stock Analysis Report
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