On Mar 15, 2013, we reiterated our long-term recommendation on
CBRE Group Inc. (
at Neutral. This reflects the company's dedicated effort toward
successful execution of strategic initiatives, which helped it
bounce back in the fourth quarter of 2012. However, stiff
competition from regional as well as international players
remains a matter of concern.
CBRE Group's broad range of real estate product and services, an
extensive knowledge of domestic and international real estate
markets as well as its hard-to-replicate intellectual capital and
technology resources helped it realize superior performances in
2012. This provided a competitive edge to the company over its
competitors and helped it achieve a growth of 10% year over year
in revenues in 2012.
Americas region remained the major revenue growth driver with
surge in leasing and outsourcing revenues. Moreover, in the
current quarter, CBRE Group bought the commercial real estate
services businesses of Atlanta-based Resource Real Estate
Partners LLC and TPA Realty Services LLC to boost its service
offering in the southeast. Going forward, we believe that such
strategic moves will help CBRE Group keep posting better results,
boosting its overall financials.
Moreover, in 2012, according to its repositioning strategy, CBRE
Group acquired a leading commercial and residential property
consultant of London - EA Shaw. The acquisition marks CBRE
Group's second major investment made in UK last year. With the
acquisition, CBRE Group strengthened its presence in the EMEA
(Europe, Middle East and Africa) region.
CBRE Group came up with an impressive result in the fourth
quarter of 2012, after performing disappointingly in the prior
quarter. The company's adjusted earnings of 55 cents per share
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.
Following the strong 2012 results, CBRE Group expects adjusted
earnings in the range of $1.40-$1.45 for full year 2013.
Moreover, Management remains encouraged by the economic
conditions of the U.S., and thus expects the Americas to remain
the biggest growth driver going forward. Also, it expects CBRE
Group to benefit from China's economic condition, which improved
recently, and the easing of credit-market tensions in Europe.
Considering all these, management looks forward to witness solid
revenues and earnings growth in 2013.
Following the release of the fourth quarter and full year 2012
results, the Zacks Consensus Estimate for full year 2013 remained
unchanged at $1.42 per share with no estimates moving up or down.
Also, the Zacks Consensus Estimate for full year 2014 stood same
at $1.65 per share as no estimates were revised. With the Zacks
Consensus Estimates remaining unchanged for both full year 2013
and 2014, CBRE Group now has a Zacks Rank #3 (Hold).
Other Stocks to Consider
REITs that are currently performing better include
Simon Property Group Inc (
Alexandria Real Estate Equities, Inc. (
Cousins Properties Inc. (
. All these stocks carry a Zacks Rank #2 (Buy).
ALEXANDRIA REAL (ARE): Free Stock Analysis
CBRE GROUP INC (CBG): Free Stock Analysis
COUSIN PROP INC (CUZ): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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