CBRE Group Inc.
) is riding high on the growth trajectory. Its shares scaled a new
52-week high, touching $32.06 during the trading session on Jun 30.
The closing price of $32.04 of this stock reflected a strong
year-to-date return of over 21%. The trading volume for the session
was nearly 2.7 million shares.
The solid momentum in its price followed the recent upgrade in its
rating by Standard & Poor's Rating Services (S&P) as well
as CBRE's retention by
) for managing the latter's 42.9 million-sq.-ft. property portfolio
in 31 markets.
Despite its strong price appreciation, this Zacks Rank #1 (Strong
Buy) stock has plenty of upside left, given the improving operating
environment, diverse revenue base and its long-term expected growth
rate of 13.5%.
On Jun 19, ushering in good news for CBRE, Standard & Poor's
Rating Services (S&P) raised its rating on the company's debt.
Specifically, the company's secured debt rating has been raised to
investment grade, BBB- from the earlier rating of BB while its
unsecured debt rating was also enhanced to BB from B+.
Moreover, CBRE's enterprise rating has been increased to BB+ from
BB with a positive outlook. CBRE's conservative financial
management as well as a hike in contractual revenue were
appreciated by the rating agency and cited as the reason for the
upgrade. (read: Another Rating Upgrade for CBRE Group).
On Jun 23, CBRE Group also disclosed its appointment by
CommonWealth REIT for managing the latter's 156 owned properties,
spanning 42.9 million sq.-ft. in 31 markets. This appointment is
scheduled to be effective on or around Oct 1, 2014. The assignment
gain mirrors CBRE's technical expertise and on-the-ground
Apart from this, in April, aided by higher revenues, CBRE reported
first-quarter 2014 adjusted earnings of 25 cents per share, well
ahead of the Zacks Consensus Estimate of 17 cents per share and up
56% year over year. The company experienced solid contributions
from the acquisition of U.K.-based commercial building technical
engineering services provider Norland Managed Services Ltd.
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
Echoing similar sentiments about the company, we notice that over
the last 60 days, the Zacks Consensus Estimate for full-year 2014
and 2015 experienced positive revisions. They now stand at $1.60
and $1.82 per share for 2014 and 2015, respectively, and reflect a
year-over-year increase of 12.1% and 13.7%.
Other Stocks to Consider
In addition to CBRE,
RLJ Lodging Trust
) scaled 52-week highs on Jun 30.
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CBRE GROUP INC (CBG): Free Stock Analysis
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