This real estate advisory and investment services firm just bought real estate consultant IVI International and launched a global brand positioning strategy. Estimates are rising, and our contributor just raised his price target on the stock.
CBRE Group (CBG)
from Barclay’s Capital Equity Research
Updated from Investment Digest 752, December 18, 2013
We are updating our model to reflect CBRE Group’s (CBG)3Q14 results and subsequent events, including the company’s mid November “Business Outlook Day”. Third quarter 2014 AEPS of $0.40 was $0.02 above our estimate and $0.05 above consensus. The result represents 32% Y/Y growth over 3Q13. Revenue growth was uniformly strong across regions on robust leasing activity, particularly in the U.S.
Management sees solid momentum throughout its business lines as underlying fundamentals continue to improve and remains encouraged by the capital markets’ enduring interest in real estate. The company believes it’s still in the early stages of market penetration in its outsourcing business. That said, contractual sources now comprise over half (51%) of CBG’s total revenues; compared to only 27% in 2006.
We are increasing our 2014 AEPS estimate to $1.68 from $1.65, representing Y/Y growth of 17.6%. CBG raised 2014 AEPS guidance by 3.1% at the midpoint to $1.65-$1.70; after a 3.2% increase at the end of 2Q14. We are also raising our 2015 AEPS estimate to $1.92 from $1.87. Our AEPS for 4Q14 is $0.68. Our five-year AEPS CAGR is 13.0%.
We are increasing our 12-month price target by $1 to $35.
Ross L. Smotrich, Barclays Capital Equity Research, www.barcap.com, 212-526-2306, December 3, 2014