On Nov 7, 2013, we upgraded our long-term recommendation on
Jones Lang LaSalle Inc.
) to Neutral from Underperform following its strong results in
third-quarter 2013 and improving market fundamentals.
E-HOUSE CHINA (EJ): Free Stock Analysis
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JONES LANG LASL (JLL): Free Stock Analysis
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Why the Upgrade?
After a disappointing performance in the prior quarter, Jones
Lang's third-quarter 2013 adjusted earnings per share came in at
$1.49, substantially ahead of the Zacks Consensus Estimate of
$1.35 per share. It also came 21% above the year-ago quarter
earnings of $1.23 per share.
Quarterly results benefited from decent growth in fee revenues,
driven by Capital Markets & Hotels and Property &
Facility Management as well as strong leasing performance.
Jones Lang, which boasts of clients like
HSBC Holdings plc.
), acquired a Houston-based property management company - Means
Knaus Partners (MKP) in the third quarter to enhance its office
property management capacities. Moreover, the company acquired
the Kansas City-area commercial real estate firm Capital Realty.
The acquisitions augur well for the company's long-term growth.
The company has also renewed and increased the capacity of its
long-term credit facility of more favorable pricing. We believe
that its increased credit facility along with a solid balance
sheet provides the company the wherewithal to carry on investing
in growth drivers going forward.
However, structural and political issues have prevented a strong
upturn in the U.S. and led to inconsistent and slow paced
development of certain Asian markets, such as China and India.
Moreover, continuation of the slowdown in Brazil is a plausible
concern for the stock. Also, Jones Lang faces stiff competition
from international, regional, and local players in the market.
For Jones Lang, over the last 7 days, the Zacks Consensus
Estimates for both 2013 and 2014 moved north. It climbed 0.8% to
$6.04 per share for 2013 and 0.3% to $6.99 per share for 2014.
Hence, the stock currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
A number of companies that are performing better and are worth a
look in the same industry include
E-House (China) Holdings Ltd
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy).