Barclays on U.S. REITs: Data Suggests Weaker 4Q U.S. Investment Sales - Lowering CBG/JLL Assumptions
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Price: $47.31 -0.23%
Rating Summary:
6 Buy, 3 Hold, 0 Sell
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays on U.S. REITs: Data Suggests Weaker 4Q U.S. Investment Sales - Lowering CBG/JLL Assumptions
Analyst, Ross L. Smotrich, said, "Taking the Real Capital Analytics (RCA) data into account, we now more conservatively assume CB Richard Ellis' (NYSE: CBG) Americas investment sales revenue is flat YOY at $166 million in 4Q11, down from $211 million (+27% YOY) previously. We continue to assume 8% YOY growth in 2012. According to our model, Americas investment sales now accounts for only 9% of CBG's total 4Q11 and FY2011 revenue, versus 11% and 10% respectively previously. We also now assume Americas investment sales revenue for Jones Lang LaSalle (NYSE: JLL) is flat YOY at $35 million, versus our previous assumption of $49 million (+40% YOY); we are also lowering our 2012 YOY growth assumption to 10% from 20%. Americas investment sales now accounts for just 3% of JLL's total 4Q11 and FY2011 revenue versus 4% previously. We expect the lower brokerage revenue could have a slightly negative impact on margins, but are maintaining our overall EBITDA margin assumptions (17.3% in 4Q11 for CBG and 14.5% for JLL)."
"Reducing Estimates. Notwithstanding our more conservative assumptions, the impact on our earnings estimates is relatively small. Specifically, we are lowering our 4Q11 adjusted EPS (AEPS) estimate to $0.49 for CBG (from $0.50) and to $2.24 for JLL (from $2.29). Our 2011 AEPS estimate for CBG is $1.06 (was $1.07) and our 2012 estimate is $1.32 (was $1.33). Similarly, our 2011 AEPS estimate for JLL is $4.52 (was $4.56) and our 2012 estimate is $5.61 (was $5.70). We are maintaining our Overweight ratings on both stocks; our 12-month price target remains $20 for CBG and our target for JLL is $84 versus $85 previously. Our price target for JLL is based on a DCF of $89 (was $91), weighted 75%, and a sentiment/regression value of $62 (unchanged), weighted 25%."
Analyst, Ross L. Smotrich, said, "Taking the Real Capital Analytics (RCA) data into account, we now more conservatively assume CB Richard Ellis' (NYSE: CBG) Americas investment sales revenue is flat YOY at $166 million in 4Q11, down from $211 million (+27% YOY) previously. We continue to assume 8% YOY growth in 2012. According to our model, Americas investment sales now accounts for only 9% of CBG's total 4Q11 and FY2011 revenue, versus 11% and 10% respectively previously. We also now assume Americas investment sales revenue for Jones Lang LaSalle (NYSE: JLL) is flat YOY at $35 million, versus our previous assumption of $49 million (+40% YOY); we are also lowering our 2012 YOY growth assumption to 10% from 20%. Americas investment sales now accounts for just 3% of JLL's total 4Q11 and FY2011 revenue versus 4% previously. We expect the lower brokerage revenue could have a slightly negative impact on margins, but are maintaining our overall EBITDA margin assumptions (17.3% in 4Q11 for CBG and 14.5% for JLL)."
"Reducing Estimates. Notwithstanding our more conservative assumptions, the impact on our earnings estimates is relatively small. Specifically, we are lowering our 4Q11 adjusted EPS (AEPS) estimate to $0.49 for CBG (from $0.50) and to $2.24 for JLL (from $2.29). Our 2011 AEPS estimate for CBG is $1.06 (was $1.07) and our 2012 estimate is $1.32 (was $1.33). Similarly, our 2011 AEPS estimate for JLL is $4.52 (was $4.56) and our 2012 estimate is $5.61 (was $5.70). We are maintaining our Overweight ratings on both stocks; our 12-month price target remains $20 for CBG and our target for JLL is $84 versus $85 previously. Our price target for JLL is based on a DCF of $89 (was $91), weighted 75%, and a sentiment/regression value of $62 (unchanged), weighted 25%."
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