CBRE Group, Inc. CBRE, the global leader in real estate services, has been gearing up to announce its third-quarter 2024 earnings on Oct. 24, before the closing bell. The company has been at the forefront of the industry, offering a wide range of services, including property sales and leasing, property management, valuation, project management and consulting.
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In the last reported quarter, this Dallas, TX-based commercial real estate services and investment firm reported an earnings surprise of 17.39%. Results reflected growth in its resilient lines of business. Global Workplace Solutions (“GWS”) experienced strong business wins with a healthy balance of new clients and expansion. The leasing business performed well due to office leasing revenue growth in the United States, driven by strength in New York. However, the Real Estate Investments segment's revenues decreased year over year.
Over the preceding four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 13.81%. The graph below depicts this surprise history:
CBRE Group, Inc. Price and EPS Surprise
CBRE Group, Inc. price-eps-surprise | CBRE Group, Inc. Quote
Factors at Play
In the third quarter, CBRE Group is likely to have benefited from its ongoing emphasis on creating a more balanced and resilient business model, transitioning to a more contractual business mix. The company's diversification across property types, business lines, geographic markets and clients is expected to have contributed positively in this period.
The increasing demand for outsourcing services offers significant opportunities for CBRE to expand its client base and offerings. In the third quarter, CBRE Group is likely to have capitalized on these favorable trends, experiencing growth in the GWS segment. Widespread demand across clients, sectors and geographies is expected to have driven its performance.
Moreover, CBRE has been prioritizing technology investments to enhance efficiency, provide unique client services and increase market share. Embracing technology has likely helped the company address current challenges.
However, persistent macroeconomic uncertainties continue to adversely impact commercial real estate transactions. Amid a volatile environment and geopolitical issues, customers remain focused on cost controls and delay their decision-making with respect to leasing.
Projections
The Zacks Consensus Estimate for third-quarter 2024 revenues is currently pegged at $8.98 billion. This suggests an increase of 14.1% year over year.
The consensus estimate for quarterly net revenues from Advisory Services stands at $2.19 billion, which indicates a rise from the year-ago quarter’s $1.99 billion.
The consensus estimate for the GWS segment’s net revenues is pegged at $2.66 billion, which implies an increase from the year-ago quarter’s $2.23 billion.
The consensus estimate for the third-quarter adjusted EBITDA for Advisory services is pegged at $363.2 million, up from $277 million reported in the year-ago quarter. For GWS, the same is pegged at $308.7 million for the quarter, up from $251 million reported a year ago.
Before the quarterly earnings release, analysts do not seem optimistic about the company’s prospects as the Zacks Consensus Estimate for the July-September quarter’s earnings per share (EPS) has remained unchanged at $1.06 in the past month. However, it suggests a 47.2% increase year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings surprise for CBRE Group this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
CBRE Group currently has an Earnings ESP of -1.73% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader real estate market — Cousins Properties CUZ and Cushman & Wakefield plc CWK — you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.
Cousins Properties is slated to report quarterly numbers on Oct. 24. CUZ has an Earnings ESP of +0.75% and a Zacks Rank of 3 presently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cushman & Wakefield is scheduled to report quarterly numbers on Nov. 4. CWK has an Earnings ESP of +4.81% and a Zacks Rank of 3 presently.
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