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What's in the Offing for CBRE Group's (CBRE) Q3 Earnings?

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CBRE Group, Inc. CBRE is slated to release third-quarter 2021 earnings on Oct 28, before the bell. Results are anticipated to display year-over-year growth in revenues and earnings.

In the last reported quarter, this Dallas, TX-based commercial real estate services and investment firm delivered a 74.36% earnings surprise. Quarterly results highlighted benefits from diversifying and expanding its resilient business in recent years.

Over the preceding four quarters, the company surpassed estimates on each occasion, the average beat being 53.54%. The graph below depicts this surprise history:

CBRE Group, Inc. Price and EPS Surprise

CBRE Group, Inc. Price and EPS Surprise
CBRE Group, Inc. Price and EPS Surprise

CBRE Group, Inc. price-eps-surprise | CBRE Group, Inc. Quote

Let’s see how things have shaped up prior to this announcement.

Factors at Play

CBRE Group is likely to have continued its focus for a better-balanced and more resilient business model during the September-end quarter, shifting the company’s business mix toward a more contractual one. Moreover, the company has made efforts in recent years to strengthen its Global Workplace Solutions (GWS) segment, which provides a broad suite of integrated, contractually-based services to occupiers of real estate, including facilities management, project management, transaction management and management consulting.

The firm has grown organically and banked on strategic in-fill acquisitions to boost its service offerings and geographical reach over the years. Strategic investments in the company’s business, specifically on the technology front, also differentiate CBRE Group from its peers.

These efforts are likely to have aided the company’s performance during the quarter under consideration. Broad diversification across property types, lines of business, geographic markets and clients, as well as a disciplined expense management are anticipated to have helped the company in the quarter under consideration.

The Zacks Consensus Estimate for quarterly revenues is currently pegged at $6.70 billion, suggesting an increase of 18.7% year on year.

The Zacks Consensus Estimate for the third-quarter fee revenues from Advisory Services is currently pinned at $2,219 million, indicating an increase from the prior quarter’s $2,135 million, and the prior-year quarter’s $1,521 million.

The estimate for GWS’ fee revenues is $1,607 million, suggesting growth from the previous quarter’s $1,538 million and the year-ago quarter’s $838 million.

Fee revenues from Real Estate Investments are estimated at $257 million for the to-be-reported quarter, calling for an increase from the second quarter’s $243 million as well as the year-earlier period’s $170 million.

Prior to the quarterly earnings release, analysts seem to be optimistic about the company’s prospects as the Zacks Consensus Estimate for the July-September quarter earnings per share moved 2 cents north to $1.20 over the past week. It also suggests a 64.38% year-over year increase.

In addition, amid the heightened macroeconomic uncertainty in Greater China, in September, CBRE Group updated about its business in Greater China and the Asia Pacific (APAC) region. The company noted that Greater China and APAC accounted for 2.5% and 10.3% of the total company revenues, respectively, for the 12-month period ended Jun 30, 2021. Also, Greater China and APAC capital markets revenues, which include property sales and commercial mortgage originations, comprised 0.2% and 1.2% of the total company revenues, respectively, for the period in discussion.

Here is what our quantitative model predicts:

Our proven model predicts an earnings surprise for CBRE Group this season. The combination of an Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CBRE Group currently carries a Zacks Rank #2 and has an Earnings ESP of +19.17%.

Other Stocks to Consider

Here are a few other stocks in the broader real estate sector that you may want to consider, as our model shows that these too have the right combination of elements to report a surprise this quarter:

Newmark Group, Inc. NMRK, set to report quarterly numbers on Nov 5, currently has an Earnings ESP of +2.01% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jones Lang LaSalle Incorporated JLL, slated to release earnings figures on Nov 3, has an Earnings ESP of +5.50% and holds a Zacks Rank of 2, currently.

Cushman & Wakefield PLC CWK, scheduled to announce quarterly results on Nov 4, has an Earnings ESP of +2.74% and sports a Zacks Rank of 1, at present.


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Cushman & Wakefield PLC (CWK) : Free Stock Analysis Report

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