When Should You Buy Jones Lang LaSalle Incorporated (NYSE:JLL)?
While Jones Lang LaSalle Incorporated (NYSE:JLL) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$262 at one point, and dropping to the lows of US$189. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Jones Lang LaSalle's current trading price of US$194 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Jones Lang LaSalle’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Jones Lang LaSalle
What's the opportunity in Jones Lang LaSalle?
According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 9.59x is currently trading slightly below its industry peers’ ratio of 10.11x, which means if you buy Jones Lang LaSalle today, you’d be paying a decent price for it. And if you believe that Jones Lang LaSalle should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. So, is there another chance to buy low in the future? Given that Jones Lang LaSalle’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Jones Lang LaSalle?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 5.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Jones Lang LaSalle, at least in the short term.
What this means for you:
Are you a shareholder? JLL’s future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at JLL? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?
Are you a potential investor? If you’ve been keeping tabs on JLL, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you'd like to know more about Jones Lang LaSalle as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Jones Lang LaSalle has 1 warning sign and it would be unwise to ignore it.
If you are no longer interested in Jones Lang LaSalle, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
