Jones Lang LaSalle JLL, better known as JLL, has a wide range of products and services and makes strategic investments to capitalize on market consolidations. Further, the company’s robust balance sheet, with a manageable debt position, is encouraging.
Moreover, a positive trend in estimate revisions reflects optimism in the company’s earnings growth prospects. Over the last 30 days, the Zacks Consensus Estimate for JLL’s 2019 earnings has moved 6.8% north. The stock currently carries a Zacks Rank #2 (Buy).
The company also has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in all of the trailing four quarters, the average positive beat being 27.62%.
The stock has rallied 23.8% over the past three months, outperforming the industry’s increase of 12.9%.
Here’s What Might Drive the Stock Higher
Organic & Inorganic Growth: JLL is focused on balanced revenue growth across profitable markets. Also, its superior client services and strategic investment in technology and innovation are expected to help grow market share and win relationships. JLL continues to invest strategically so as to capitalize on market consolidations. Its superior operating platform and market-share expansion have helped record remarkable growth as well as a decent cash level.
In fact, over the past several years, the company has completed several strategic acquisitions as part of its global growth strategy, thereby expanding JLL’s capabilities in certain service offerings. In July 2019, JLL announced the conclusion of the HFF Inc. acquisition. The move came as part of JLL’s effort to substantially boost its Capital Markets business. Moreover, the company completed two new strategic acquisitions — Latitude Real Estate Investors and Corporate Concierge Services — in the first quarter. These acquisition efforts helped fortify the company’s capabilities and boost its presence in key regional markets.
Flourishing Outsourcing Business: JLL’s Corporate Solutions business, the company’s multi-service outsourcing business, including integrated Facility Management and Corporate Solutions-related services from Leasing, Project & Development, as well as Advisory & Consulting, is well poised to bank 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 strengthen JLL’s performance in the upcoming period.
Cash Flow Growth: JLL enjoyed historical cash flow growth (three to five years) of 14.6%, which comfortably exceeded 8.4% growth registered by the industry. Also, its current cash flow growth of 27% compares favorably with the 6.1% increase estimated for the industry.
Superior Return on Equity (ROE): JLL’s ROE is 15.64% compared with the industry average of 3.32%. This highlights that the company reinvests more efficiently compared to the industry.
Strong Balance Sheet: JLL’s robust balance sheet helps manage debt-level efficiently. The company enjoys credit facility of $2.75 billion that will mature in 2023. This will likely enhance its financial flexibility. Although the company’s net debt increased in the third quarter, reflecting around $840 million of net cash outflow to acquire HFF, marking a strategic move for long-term growth. Moreover, the company enjoys investment grade ratings — Moody’s: Baa1 and S&P: BBB+ — which reflects financial and balance-sheet strength. Hence, with a solid balance sheet and sufficient financial flexibility, JLL remains well poised to continue with its growth momentum.
Other Stocks to Consider
Colliers International Group Inc.’s CIGI Zacks Consensus Estimate for 2019 remained unchanged at $4.54 in a month’s time. At present, the stock sports a Zacks Rank of 1 (Strong Buy). Its shares have rallied 13.5% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
RE/MAX Holdings, Inc.’s RMAX Zacks Consensus Estimate for the ongoing year remained unrevised at $2.17 in a week’s time. The stock currently carries a Zacks Rank of 2. Its shares have appreciated 7% over the past six months.
Newmark Group, Inc.’s NMRK Zacks Consensus Estimate for the current year moved north to $1.66 in seven days’ time. Currently, the stock holds a Zacks Rank of 2. Its shares have gained 48.8% in six months’ time.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report
Colliers International Group Inc. (CIGI) : Free Stock Analysis Report
RE/MAX Holdings, Inc. (RMAX) : Free Stock Analysis Report
Newmark Group, Inc. (NMRK) : Free Stock Analysis Report
To read this article on Zacks.com click here.