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A month has gone by since the last earnings report for Jones Lang LaSalle Incorporated JLL. Shares have added about 10.9% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is JLL due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Jones Lang LaSalle Tops Q4 Earnings, Revenue Estimates
JLL reported fourth-quarter 2017 adjusted earnings of $4.92 per share, beating the Zacks Consensus Estimate of $4.30. The bottom line also compared favorably with the year-ago adjusted earnings of $3.95 per share.
For full-year 2017, the company reported adjusted EPS of $9.16, up from $8.13 recorded in 2016. Also, the figure surpassed the Zacks Consensus Estimate of $8.57.
Revenues for the quarter were $2.54 billion, surpassing the Zacks Consensus Estimate of $2.33 billion. The figure was up 17% year over year. Fee revenues were up 18% year over year to $2.18 billion. For 2017, revenues were $7.93 billion, up 17% year over year. Also, it surpassed the Zacks Consensus Estimate of $7.73 billion.
Results highlight a robust organic growth and strong cash flows from operations. The company experienced Real Estate Services revenue growth that was mainly organic. Moreover, the company could achieve improvement in margin across Americas, Asia Pacific and LaSalle.
Behind the Headline Numbers
During the fourth quarter, JLL’s Real Estate Services (RES) revenues climbed 19% year over year to $2.4 billion. In the Americas, total revenues and fee revenues were $1 billion and $992.9 million, respectively, indicating 17% year-over-year growth for both. Results were driven by Advisory, Consulting and Other, with contributions from Technology Solutions and the recently acquired U.S. valuations platform. Leasing was also strong amid favorable market conditions.
Total revenues and fee revenues of the EMEA segment were $858.9 million and $669.6 million, respectively, with both increasing 22% from the year-ago period. This was backed by growth across all service lines.
For the Asia Pacific, total revenues and fee revenues were $541.2 million and $424.2 million, respectively, marking a jump of 24% and 21% from last year. Robust performance in Capital Markets & Hotels and Property & Facility Management attributed to this growth. This upswing was driven by improvement recorded in Australia, Greater China, Japan and India.
Revenues from the LaSalle Investment Management segment declined 8% year over year to $92.9 million. Lower incentive fees, along with a decline in transaction fees & other, led to the fall. At the end of the fourth quarter, assets under management were around $58.1 billion, down from $59.0 billion recorded at the end of the prior quarter.
Jones Lang exited the reported quarter with cash and cash equivalents of $268 million, up from $258.5 million as of Dec 31, 2016. At the end of fourth-quarter 2017, the company’s net debt totaled $586.2 million, down $426.6 million from the prior-quarter end. This reflects a significant improvement in the company’s working capital management.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
Jones Lang LaSalle Incorporated Price and Consensus
Jones Lang LaSalle Incorporated Price and Consensus | Jones Lang LaSalle Incorporated Quote
At this time, JLL has a strong Growth Score of A, though it is lagging a lot on the momentum front with a D. The stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, JLL has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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