CBRE Group, Inc. (CBG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are upgrading our recommendation on CBRE to Neutral from Underperform following better-than-expected first-quarter results. Aided by higher revenues, CBRE Group's first-quarter 2014 adjusted earnings per share came in well ahead of the Zacks Consensus Estimate and up 56% year over year. With market conditions continuing to improve, we believe that opportunistic acquisitions would serve as growth drivers, supplementing the company's organic growth. Improving property sales, leasing and outsourcing business also augur well going forward. Despite the regulatory limits on GSEs lending and unfavorable foreign currency movement, we believe that the strategic investments in people and platform stand good for the long-term perspective of this company and would help it to enhance its market share.

Overview:

Headquartered in Los Angeles, CBRE Group, Inc., is a commercial real estate services and investment firm, offering a wide range of services to tenants, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estates in all major metropolitan areas across the globe. The services include valuation, real estate investment management, commercial property and corporate facilities management, tenant representation, occupier and property/agency leasing, property sales, commercial mortgage origination and servicing, capital markets (equity and debt) solutions, development services and proprietary research. Revenues are generated by the company from management fees on a contractual and per-project basis, as well as from commissions on transactions.

CBRE reports its operating results under 5 segments: the Americas, EMEA (Europe, the Middle East and Africa), the Asia-Pacific, Global Investment Management and Development Services.

The Americas is the largest segment of operations and provides a wide range of services throughout the U.S., as well as in the largest metropolitan regions of Canada and key markets of Latin America.

The EMEA segment operates in 40 countries, with its largest operations in the UK, France, Spain, Germany, the Netherlands and Italy. Within EMEA, services are organized along the same lines as in the Americas, including brokerage, investment properties, corporate services, valuation/appraisal services, asset management services and facilities management among others.

The Asia Pacific segment operates in 13 countries, primarily China, Hong Kong, India, Japan, Singapore, South Korea, Australia and New Zealand.

The Global Investment Management segment offers investment management services to clients who seek to generate returns and diversification through direct and indirect real estate investments across North America, Europe and Asia.

The Development Services segment provides commercial real estate development and investment services primarily in the U.S.

The full-year 2013 revenue contribution as per the segments is given below:


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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