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Cushman & Wakefield Q3 Earnings: Can NYSE:CWK Hit Its $0.16 EPS Target?

in EARNINGS/INVESTING IDEAS by

Cushman & Wakefield plc (NYSE:CWK) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.16/share on revenue of $1.716 billion. The consensus earnings per share (EPS) of $0.16/share is based on a poll of 7 analysts and represents a decline in eps of −57.6% over the same quarter last year, when the company reported earnings of $0.37/share.

The revenue forecast of $1.716 billion based on a poll of 3 analysts implies a year-over-year (YoY) decline in revenue of −19.0%. Last year the company reported $2.119 billion in revenue for the quarter.

Expected to report EPS contraction of −57.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,716.43 $2,118.80 −19.0%
EPS $0.16 $0.37 −57.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarter.

What are your expectations from Cushman & Wakefield plc for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.08 $0.19 123.7% Beat
Q1, 2020 $0.12 $0.03 −75.2% Missed
Q4, 2019 $0.73 $0.78 6.6% Beat
Q3, 2019 $0.45 $0.37 −17.9% Missed
Q2, 2019 $0.40 $0.39 −3.7% Missed
Q1, 2019 $0.07 $0.10 34.0% Beat
Q4, 2018 $0.59 $0.59 0% Met
Q3, 2018 $0.18 $0.45 146.2% 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 1.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $10.60 $10.79 1.8% Increase
May 7, 2020 $10.81 $11.17 3.3% Increase
February 27, 2020 $17.23 $18.19 5.6% Increase
November 5, 2019 $19.10 $18.24 −4.5% 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 −2.74, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.74 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Cushman & Wakefield plc is currently trading at $10.87/share, down −4.7% for the day. The company is trading at approximately 52.9% of its 52-week high of $20.80/share. The company’s stock price is up 0.7% since the last earnings report and down −6.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 44.80 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CWK Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −17.03 and a forward P/E multiple of 16.60.

Cushman & Wakefield plc’s current share price also implies a price-to-book (P/B) multiple of 2.33. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $10.87
P/E Ratio −17.0x
P/E Ratio (Fwd) 16.6x
PEG Ratio 0.2
Total Debt / Total Capital 61.4%
Levered Free Cash Flow $59.9 million
EV / EBITDA 15.5x

Finbox

Cushman & Wakefield plc is a mid-cap stock with a market capitalization of $2.517 billion and a total enterprise value of $5.649 billion. The company operates in the Real Estate sector and the Real Estate Management & Development industry.

Cushman & Wakefield plc provides commercial real estate services under the Cushman & Wakefield brand in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company’s operating segments include the Americas; Europe, Middle East and Africa; and Asia Pacific. It offers integrated facilities management, project and development, portfolio administration, transaction management, and strategic consulting services; property management services, including client accounting, engineering and operations, lease compliance administration, project and development, and sustainability services; and janitorial, maintenance, critical environment management, landscaping, and office services. The company also provides owner representation and tenant representation leasing services; capital market services, such as investment sales and equity, and debt and structured financing for real estate purchase and sales transactions; and appraisal management, investment management, valuation advisory, portfolio advisory, diligence advisory, dispute analysis and litigation support, financial reporting, and property and/or portfolio valuation services on real estate debt and equity decisions. Cushman & Wakefield has a strategic partnership with Vanke Service. It serves real estate owners and occupiers. Cushman & Wakefield plc was founded in 1784 and is headquartered in Chicago, Illinois.

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