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CBRE Group Inc (CBRE)
NYSE:CBRE
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CBRE Group
(NYSE:CBRE)74Outperform
Positive Factors
Earnings Growth
The adjusted EPS estimate for 2025 has been raised, suggesting confidence in future earnings growth.
Financial Performance
Revenue, core earnings, and cash flow exceeded expectations led by outperformance in all 3 business segments.
Market Position
CBRE is the largest commercial real estate services and investment firm in the world, operating in over 100 countries and serving 90% of Fortune 100 companies.
Negative Factors
CBRE Group (CBRE) vs. S&P 500 (SPY)
Market Cap
$41.88B
Dividend YieldN/A
Average Volume (3M)1.89M
Price to Earnings (P/E)44.4
Beta (1Y)1.31
Revenue Growth11.95%
EPS Growth-1.25%
CountryUS
Employees14,000
SectorReal Estate
Sector Strength72
IndustryReal Estate
Share Statistics
EPS (TTM)3.15
Shares Outstanding300,037,480
10 Day Avg. Volume1,810,797
30 Day Avg. Volume1,891,659
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)N/A
Price to Sales (P/S)1.18
Price to Cash Flow (P/CF)7.90
P/FCF Ratio7.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$156.63Price Target Upside12.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
CBRE Group Business Overview & Revenue Model
Company DescriptionCBRE Group, Inc. is a global leader in commercial real estate services and investment. Operating across a broad spectrum of sectors including office, industrial, retail, and multifamily properties, CBRE offers a comprehensive array of services such as property management, leasing, capital markets, advisory and transaction services, as well as valuation and development services. The company primarily serves investors, occupiers, and developers worldwide, leveraging its extensive market knowledge and industry expertise to deliver tailored solutions that enhance client value.
How the Company Makes MoneyCBRE Group generates revenue through a diversified business model with key revenue streams including advisory services, global workplace solutions, and real estate investment. Advisory services encompass property management, leasing, and valuation, which provide recurring income from management fees and commissions. The global workplace solutions segment offers facilities management and project management services, generating revenue through long-term contracts with corporate clients. Additionally, CBRE earns from real estate investment through its subsidiary, CBRE Investment Management, which manages investment funds and provides asset management services, earning fees based on assets under management and performance. Significant partnerships with corporations and institutional investors, along with its strategic focus on innovation and technology, further contribute to CBRE's earnings by enhancing service delivery and expanding market reach.
CBRE Group Financial Statement Overview
Summary
CBRE Group exhibits strong financial health characterized by significant revenue growth, stable profitability, and efficient cash flow management. The company's low leverage and solid equity position provide a strong foundation for future growth. Opportunities for improvement include enhancing net profit margins and optimizing asset utilization to further increase returns.Income Statement
CBRE Group has shown robust revenue growth, with a 11.95% increase in 2024 compared to 2023. The gross profit margin improved significantly to 58.35% in 2024, indicating efficient cost management. Net profit margin remained stable at 2.71%, suggesting consistent profitability. EBIT margin increased to 3.95%, while EBITDA margin was 5.70%, reflecting strong operational performance. Overall, the company demonstrates solid growth and stable profitability, although net margins could be higher.82
Very Positive
Balance Sheet
The balance sheet shows a healthy debt-to-equity ratio of 0.21 in 2024, indicating low leverage and financial stability. Return on equity (ROE) is 11.51%, reflecting decent profitability relative to shareholder investment. The equity ratio is 34.49%, suggesting a conservative financial structure. While the company maintains a strong equity base, improvements in asset utilization could enhance returns.75
Positive
Cash Flow
Cash flow analysis reveals a strong free cash flow growth of 700% in 2024, driven by significant increases in operating cash flow. The operating cash flow to net income ratio is 1.77, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is 1.45, reflecting robust cash management. This strong cash flow position provides CBRE with flexibility for future investments and debt repayments.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 35.77B | 31.95B | 30.83B | 27.75B | 23.83B | Gross Profit |
| 6.96B | 6.27B | 6.59B | 6.17B | 4.78B | EBIT |
| 1.41B | 1.12B | 1.51B | 2.39B | 969.76M | EBITDA |
| 1.95B | 1.74B | 1.94B | 2.91B | 1.47B | Net Income Common Stockholders |
| 968.00M | 986.00M | 1.41B | 1.84B | 751.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.11B | 1.26B | 1.32B | 2.43B | 1.90B | Total Assets |
| 24.38B | 22.55B | 20.51B | 22.07B | 18.04B | Total Debt |
| 1.73B | 4.83B | 3.49B | 4.20B | 4.10B | Net Debt |
| 615.00M | 3.56B | 2.17B | 1.77B | 2.20B | Total Liabilities |
| 15.19B | 13.48B | 11.91B | 12.71B | 10.92B | Stockholders Equity |
| 8.41B | 8.27B | 7.85B | 8.53B | 7.08B |
| Cash Flow | Free Cash Flow | |||
| 1.40B | 175.00M | 1.37B | 2.15B | 1.56B | Operating Cash Flow |
| 1.71B | 480.00M | 1.63B | 2.36B | 1.83B | Investing Cash Flow |
| -1.51B | -681.00M | -832.46M | -1.28B | -341.58M | Financing Cash Flow |
| -221.00M | 154.00M | -1.77B | -490.63M | -625.26M |
CBRE Group Technical Analysis
Neutral
139.59
Price Trends
137.10
Positive
134.53
Positive
118.91
Positive
Market Momentum
0.29
Positive
48.61
Neutral
62.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBRE, the sentiment is Neutral. The current price of 139.59 is below the 20-day moving average (MA) of 141.78, above the 50-day MA of 137.10, and above the 200-day MA of 118.91, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 48.61 is Neutral, neither overbought nor oversold. The STOCH value of 62.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CBRE.
CBRE Group Risk Analysis
CBRE Group disclosed 33 risk factors in its most recent earnings report. CBRE Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CBRE Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $12.44B | 23.26 | 8.08% | ― | 12.87% | 142.90% | |
74 Outperform | $41.88B | 44.38 | 11.51% | ― | 11.95% | -1.25% | |
68 Neutral | $2.49B | 40.08 | 2.01% | 0.83% | 10.67% | 47.10% | |
64 Neutral | $9.21B | 41.22 | 12.21% | 0.24% | 13.08% | 146.40% | |
63 Neutral | $1.53B | ― | -10.38% | 2.05% | 6.69% | -137.52% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
58 Neutral | $2.62B | 20.44 | 7.48% | ― | -0.50% | ― |
* Real Estate Sector Average
Performance Comparison
CBRE
CBRE Group
139.59
47.29
51.24%
JLL
Jones Lang Lasalle
262.41
75.25
40.21%
EXPI
eXp World Holdings
9.95
-2.07
-17.22%
NMRK
Newmark Group
13.81
3.27
31.02%
CWK
Cushman & Wakefield
11.40
1.60
16.33%
TSE:CIGI
Colliers International Group
181.99
23.95
15.16%
CBRE Group Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -0.75% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong financial performance with record-breaking results, strategic acquisitions, and significant growth in resilient business segments. However, challenges in investment management, flat industrial leasing, and uncertain capital markets recovery present some headwinds. Despite these, the company's robust cash flow and share repurchase activity indicate a positive outlook.Highlights
Record-Breaking Quarter
Q4 2024 was CBRE's best quarter ever for core earnings and free cash flow, with broad strength across the business.
Significant Business Acquisitions
Acquired Industrious, a premium flex workplace provider, and completed the combination of CBRE project management with Turner & Townsend.
High Growth in Resilient Businesses
Resilient businesses grew net revenue by 16% in Q4 and 14% for the year, contributing nearly 60% of total SOP for the year.
Impressive Leasing Revenue Growth
Globally, leasing revenue grew by 15%, with U.S. office leasing delivering 28% revenue growth.
Strong Cash Flow and Capital Allocation
Free cash flow exceeded $1.5 billion for the year with almost 100% conversion, surpassing the 75% to 85% target range.
Robust Share Repurchase Activity
Repurchased more than $800 million worth of shares since the end of the third quarter.
Lowlights
Challenges in Investment Management
Operating profit declined in Q4, partly due to a ramp-up of costs in anticipation of increased capital raising.
Flat Industrial Leasing
Industrial leasing was essentially flat, indicating stabilization rather than growth.
Currency Headwinds
Guidance includes a currency translation headwind of 1% to 2% in the consolidated outlook.
Uncertain Capital Markets Recovery
Capital markets activity is still below peak levels, and future growth is uncertain due to potential interest rate volatility.
Company Guidance
During the CBRE Fourth Quarter 2024 Earnings Conference Call, the company provided robust guidance for 2025, projecting core EPS to range between $5.80 and $6.10, representing over 16% growth at the midpoint. This growth is underpinned by mid-teens SOP growth across resilient lines of business and continued momentum in leasing and capital markets. The company's resilient businesses, including facilities management and project management, contributed nearly 60% to the total SOP for the year, with net revenue growing 16% in the quarter and 14% for the year. Additionally, CBRE anticipates maintaining strong free cash flow generation, approximating last year's total of $1.5 billion, with a free cash flow conversion within the 75% to 85% target range. The company also highlighted its strategic M&A activities, deploying approximately $2 billion in capital during 2024, and emphasized its high conviction in future growth prospects, supported by ongoing share repurchases.CBRE Group Corporate Events
Executive/Board ChangesM&A TransactionsBusiness Operations and Strategy
CBRE Group Expands with Industrious Acquisition and Leadership Changes
Positive
Jan 14, 2025
On January 14, 2025, CBRE Group announced a definitive agreement to acquire Industrious National Management Company, a leader in flexible office solutions. This strategic acquisition involves creating a new business segment, Building Operations & Experience (BOE), which will integrate CBRE’s existing facilities and property management services with Industrious’ offerings. The move is expected to enhance CBRE’s market position by delivering scalable, innovative building operations solutions globally. Additionally, changes in leadership roles were announced, with key executives stepping into new positions to drive growth and strategic alignment, reflecting CBRE’s commitment to evolving its business structure and leadership to capitalize on industry trends and opportunities.
Executive/Board ChangesM&A Transactions
CBRE Group Expands with Turner & Townsend Merger
Positive
Jan 3, 2025
CBRE Group announced the completion of its project management business combination with Turner & Townsend, enhancing its global footprint in program and project management services. Vincent Clancy, CEO and Chair of Turner & Townsend, joins CBRE’s Board, bringing significant industry expertise and leadership that is expected to strengthen CBRE’s position in key growth sectors such as infrastructure and green energy.
Executive/Board ChangesBusiness Operations and Strategy
CBRE Group Appoints New Co-CEOs for Investment Division
Neutral
Dec 6, 2024
CBRE Group has appointed Adam Gallistel and Andy Glanzman as Co-Chief Executive Officers of its Investment Management division, with Gallistel focusing on investment strategy and investor engagement, while Glanzman oversees business strategy and operations. This leadership duo aims to leverage their complementary skills to capitalize on growth opportunities and enhance CBRE’s real assets solutions for clients.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.