CBRE Group Inc. (CBG), the real estate services firm, is riding on the growth trajectory. The company is primarily focusing on enhancing its geographic coverage and broadening its service offerings. In accordance with that, last month CBRE Group announced that it has been chosen for providing real estate services to Southern California’s MemorialCare Health System (read more: CBRE Wins MemorialCare Health System Service Contract).
Moreover, in October, the company disclosed the acquisition of a shopping center management, leasing and consulting company – PSM Center Management AG – in Zurich, Switzerland. With market conditions continuing to improve, we believe that opportunistic acquisitions would serve as growth drivers, supplementing the company’s organic growth.
Notably, the company, which currently holds a Zacks Rank #2 (Buy), has a broad range of real estate products and services, along with an extensive knowledge of domestic and international real estate markets that enable it to operate as a single-source provider of real estate solutions.
Late October, CBRE came up with third-quarter 2014 adjusted earnings of 36 cents per share, a penny ahead of the Zacks Consensus Estimate and up 16% year over year. Results were driven by solid growth in leasing, particularly in the U.S. Based on a solid performance in the first nine months of 2014, the company has again raised its adjusted earnings per share expectation by 5 cents.
Going forward, we expect the company to benefit from improvement in leasing, property sales and outsourcing business, going forward. Moreover, strategic buyouts have played a vital role in enhancing CBRE’s geographic coverage as well as broadening its service offerings.
However, regulatory limits on GSEs lending remain a plausible concern. At the same time, the company’s international presence often exposes it to unfavorable foreign currency movements affecting top-line growth.
Over the last 30 days, the Zacks Consensus Estimate for 2014 and 2015 remained stable at $1.67 and $1.89 per share, respectively.
To gain a deeper insight into CBRE Group, you can refer to our updated research report issued on Dec 1, 2014.
Investors interested in the real estate industry may also consider stocks like Reis, Inc. (REIS), Jones Lang LaSalle Inc. (JLL) and Kennedy-Wilson Holdings, Inc. (KW). All stocks currently carry a Zacks Rank #2 (Buy).
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