Shares of CBRE Group Inc. (CBG), a leading real estate investment trust (REIT), touched a 52-week high of $25.69 on Thursday, Apr 11, 2013, as it gained momentum after robust fourth-quarter 2012 results. The closing price of this REIT on Apr 11, 2013 was $25.50, representing a year-to-date return of 25.2%. The average trading volume over the last 3 months was nearly 1.9 million shares.
Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given its strong fundamentals and successful execution of strategic initiatives.
Growth Drivers
CBRE Group came up with impressive results in the fourth quarter of 2012, after performing disappointingly in the prior quarter, with earnings per share substantially surpassing the Zacks Consensus Estimate. Aided by strong top-line growth in all operating regions, this leading commercial real estate services firm bounced back to growth in the fourth quarter.
Furthermore, CBRE Group’s recent efforts to boost its portfolio restructuring initiatives are encouraging. In Jan 2013, CBRE Group bought the commercial real estate services businesses of Atlanta-based Resource Real Estate Partners LLC and TPA Realty Services LLC to enhance its service offering in the southeast. Also, last month, CBRE Group acquired a Prague-based full-service real estate provider firm – IMPACT-CORTI a.s – to augment its competence in the Central European region. Going forward, we believe that such strategic moves will help CBRE Group to strengthen its position in high-end markets, which in turn, will elevate its overall financials.
On Feb 6, CBRE Group reported adjusted earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate by 6 cents. Also, earnings substantially exceeded the last quarter and prior-year quarter figure of 26 cents and 46 cents, respectively. For full-year 2012, CBRE reported adjusted earnings of $1.22 per share, higher than the Zacks Consensus Estimate by a penny and outpaced the prior-year earnings of $1.03 per share by 18%.
CBRE Group’s broad range of real estate product and services, extensive knowledge of domestic and international real estate markets as well as its intellectual capital and technology resources helped it to realize superior performances in 2012. Notably, in 2012, the company recorded the highest total revenue in its history with highest earnings and normalized EBITDA since 2007.
Estimate Revisions
Over the last 30 days, the Zacks Consensus Estimate for full-year 2013 remained unchanged at $1.42. On the other hand, the Zacks Consensus Estimate for full-year 2014 climbed 1.2% to $1.67 per share.
On Apr 11, a number of REITs achieved 52-week highs. These include DDR Corp. (DDR), Prologis Inc. (PLD) and Duke Realty Corporation (DRE).
CBRE GROUP INC (CBG): Free Stock Analysis Report
DDR CORP (DDR): Free Stock Analysis Report
DUKE REALTY CP (DRE): Free Stock Analysis Report
PROLOGIS INC (PLD): Free Stock Analysis Report
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