Can CBRE Group Stock Keep Its Winning Streak Alive in Q1?

CBRE Group, Inc. CBRE, the global leader in real estate services, is gearing up to announce its first-quarter 2025 earnings on April 24 before the bell. The company has established itself as a leader in the industry, delivering a comprehensive suite of services such as property sales and leasing, property management, valuation, project management and consulting.

In the last reported quarter, this Dallas, TX-based commercial real estate services and investment firm reported an earnings surprise of 4.98%. Results reflected revenue growth in its resilient lines of business. The quarter marked the best quarter ever for core earnings and free cash flow with broad-based strength across its Advisory Services, GWS and Real Estate Investments business segments.

Over the preceding four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 12.16%. The graph below depicts this surprise history:

CBRE Group, Inc. Price and EPS Surprise

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

CBRE: Factors at Play

During the first quarter, CBRE Group is likely to have witnessed positive results from its continued focus on building a more balanced and resilient operating model, marked by a shift toward a greater share of contractual revenues. Its broad diversification across asset types, service lines, global markets and client base — combined with prudent cost control —is likely to have supported performance during the period. The company is expected to have benefited from the solid leasing business.

The increasing demand for outsourcing services offers significant opportunities for major industry players like CBRE to expand their client base and offerings. In the first quarter, CBRE Group is likely to have capitalized on these favorable trends. Facilities management is likely to have demonstrated solid momentum across both enterprise and local operations, with a healthy mix of new client wins and account expansions. Growth appears particularly strong in key enterprise sectors such as technology, industrial, data centers and healthcare.

In addition, CBRE is placing a strong emphasis on technology investments aimed at boosting operational efficiency, delivering differentiated client solutions and expanding its market presence. Leveraging technology is likely to have enabled the company to navigate current headwinds more effectively. Cost-cutting measures are also expected to have supported margin enhancement.

Nevertheless, ongoing macroeconomic uncertainty continues to weigh on commercial real estate transaction activity. Elevated interest rates have strained credit markets, prompting investors to remain cautious and extend deal timelines. While a significant recovery may still be out of reach, a gradual but steady improvement in the Advisory Services segment is anticipated in the first quarter.

Projections for CBRE

CBRE Group has made some strategic moves recently. These include the integration of its project management capabilities into Turner & Townsend, its subsidiary, and acquiring full ownership of Industrious, a provider of premium flexible workplace solutions. These efforts led to the company establishing new business segments this year: Building Operations & Experience, comprising enterprise and local facilities management and property management, which will include flexible workplace solutions, and Project Management, consisting of the combined Turner & Townsend/CBRE project management business.

The company’s four business segments, effective Jan. 1, 2025, are Advisory Services, Building Operations & Experience, Project Management and Real Estate Investments.

The Zacks Consensus Estimate for quarterly revenues is currently pegged at $8.91 billion. This suggests an increase of 12.29% year over year. 

Before the quarterly earnings release, analysts do not seem optimistic about the company’s prospects as the Zacks Consensus Estimate for the January-March quarter’s earnings per share (EPS) has moved south four cents to 81 cents over the past two months. However, it suggests a 3.85% increase year over year.(See the Zacks Earnings Calendar to stay ahead of market-making news.)

Here is What Our Quantitative Model Predicts for CBRE:

Our proven model predicts 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 the case here.

CBRE Group currently carries a Zacks Rank of 3 and has an Earnings ESP of +1.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Another Stock That Warrants a Look

Here is another stock from the real estate operations industry — Jones Lang LaSalle Incorporated JLL — you may want to consider as our model shows that this also has the right combination of elements to report a surprise this quarter.

Jones Lang LaSalle is slated to report quarterly numbers on May 7. JLL has an Earnings ESP of +9.69% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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