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CBRE Q3 Earnings: Can NYSE:CBRE Hit Its $0.42 EPS Target?

in EARNINGS/INVESTING IDEAS by

CBRE Group, Inc. (NYSE:CBRE) is scheduled to report Q3 earnings results on October 29, 2020.

The company is expected to report earnings of $0.42/share on revenue of $5.3 billion. The consensus earnings per share (EPS) of $0.42/share is based on a poll of 7 analysts and represents a decline in eps of −47.0% over the same quarter last year, when the company reported earnings of $0.79/share.

The revenue forecast of $5.3 billion based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −10.5%. Last year the company reported $5.925 billion in revenue for the quarter.

Expected to report EPS contraction of −47.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $5,300.07 $5,925.10 −10.5%
EPS $0.42 $0.79 −47.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from CBRE Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.38 $0.35 −7.7% Missed
Q1, 2020 $0.71 $0.75 6.4% Beat
Q4, 2019 $1.35 $1.32 −1.9% Missed
Q3, 2019 $0.78 $0.79 0.8% Beat
Q2, 2019 $0.76 $0.81 6.0% Beat
Q1, 2019 $0.61 $0.79 28.9% Beat
Q4, 2018 $1.13 $1.21 7.5% Beat
Q3, 2018 $0.75 $0.79 4.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 31, 2020 $43.27 $43.81 1.2% Increase
May 7, 2020 $38.15 $41.60 9.0% Increase
February 27, 2020 $56.93 $56.14 −1.4% Decline
November 6, 2019 $55.54 $54.50 −1.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.46, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.46 implies a 0.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

CBRE Group, Inc. is currently trading at $45.58/share, down −2.3% for the day. The company is trading at approximately 70.4% of its 52-week high of $64.75/share. The company’s stock price is up 4.0% since the last earnings report and down −4.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 37.71 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CBRE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 13.00 and a forward P/E multiple of 19.56.

CBRE Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.39. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $45.58
P/E Ratio 13.0x
P/E Ratio (Fwd) 19.6x
PEG Ratio 1.7
Total Debt / Total Capital 22.2%
Levered Free Cash Flow $1.219 billion
EV / EBITDA 10.2x

Finbox

CBRE Group, Inc. is a large-cap stock with a market capitalization of $14.931 billion and a total enterprise value of $18.142 billion. The company operates in the Real Estate sector and the Real Estate Management & Development industry.

CBRE Group, Inc. operates as a commercial real estate services and investment company worldwide. It operates through Advisory Services, Global Workplace Solutions, and Real Estate Investments segments. The Advisory Services segment provides strategic advice and execution to owners, investors, and occupiers of real estate in connection with leasing; property sales and mortgage services under the CBRE Capital Markets brand; property and project management services, including construction management, marketing, building engineering, accounting, and financial services for owners of and investors in office, industrial, and retail properties; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses, and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory, and environmental consulting. The Global Workplace Solutions segment offers facilities management, project management, and transaction management services. The Real Estate Investments segment provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments, and other institutional investors; development services under the Trammell Crow Company brand primarily to users of and investors in commercial real estate; and flexible-space solutions under the CBRE Hana brand, which includes office suites, conference rooms and event space, and communal co-working space for institutional property owners. It also develops residential-led and mixed-use sites in London under the Telford Homes brand. The company was founded in 1906 and is headquartered in Los Angeles, California.

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