Is Jones Lang LaSalle (JLL) Poised to Beat Earnings Estimates?


Jones Lang LaSalle Incorporated (JLL) is slated to release its fourth-quarter 2013 results after the closing bell on Jan 28, 2013. In the past quarter, the company delivered a 10.37% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

We expect Jones Lang LaSalle to benefit from the rise in fee revenues, owing to Capital Markets & Hotels and Property & Facility Management as well as solid leasing performance. The company has also renewed and increased the capacity of its long-term credit facility of more favorable pricing and this is encouraging.

Last November, Jones Lang LaSalle disclosed that it was selected by Gemalto – a leading international digital security company – to act as adviser for its worldwide real estate operations. The company also acquired a Houston-based property management company – Means Knaus Partners (:MKP) in the third quarter to enhance its office property management capacities.

Yet, structural and political issues have prevented a strong upturn in the U.S. and led to inconsistent and slow paced development of certain Asian markets. Moreover, continuation of the slowdown in Brazil is also a plausible concern for the stock.

Earnings Whispers

Our proven model does not conclusively show that Jones Lang LaSalle is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zero Zacks ESP: This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at $3.10. This leads to an ESP of 0.00% for Jones Lang LaSalle.

Zacks Rank #3 (Hold): Jones Lang LaSalle’s Zacks Rank #3 (Hold) lowers the predictive power of ESP because this Zacks Rank when combined with a +0.00% Earnings ESP makes surprise prediction difficult.

Notably, we caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other stocks to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Ventas Inc. (VTR), with an Earnings ESP of + 0.94% and a Zacks Rank #2. The company will report its fourth-quarter 2013 results on Feb 14, before the opening bell.

Public Storage (PSA), with an Earnings ESP of + 2.48% and a Zacks Rank #2 (Buy). The company is scheduled to report its fourth-quarter 2013 results on Feb 20.

Liberty Property Trust (LRY), with an Earnings ESP of +1.59% and a Zacks Rank #3. The company will report its fourth-quarter 2013 results on Feb 4, before the opening bell.

Read the Full Research Report on JLL
Read the Full Research Report on VTR
Read the Full Research Report on PSA
Read the Full Research Report on LRY

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