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CBRE Group, Inc. Just Beat EPS By 47%: Here's What Analysts Think Will Happen Next

Simply Wall St
·3 min read

CBRE Group, Inc. (NYSE:CBRE) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$5.6b, some 6.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.55, 47% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for CBRE Group

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earnings-and-revenue-growth

Following last week's earnings report, CBRE Group's six analysts are forecasting 2021 revenues to be US$24.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to descend 11% to US$2.87 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$24.3b and earnings per share (EPS) of US$2.84 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$54.00. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on CBRE Group, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$47.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CBRE Group's past performance and to peers in the same industry. We would highlight that CBRE Group's revenue growth is expected to slow, with forecast 1.0% increase next year well below the historical 17%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CBRE Group.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$54.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CBRE Group going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - CBRE Group has 2 warning signs we think you should be aware of.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.