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4 Reasons to Buy Jones Lang LaSalle (JLL) Stock Right Now

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Shares of Jones Lang LaSalle JLL, better known as JLL, have been displaying a solid run on the bourse, so far in the year. The stock has appreciated 31.1% compared with its industry’s 6.8% growth.

Zacks Investment Research
Zacks Investment Research

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Moreover, a positive trend in estimate revisions reflects optimism in the company’s earnings growth prospects. Over the past two months, the Zacks Consensus Estimate for JLL’s 2021 and 2022 earnings have moved 16.2% and 7.5% north, respectively, to $12.25 and $13.46.

The fundamentals appear solid for this Zacks Rank #2 (Buy) stock. In addition, there is enough scope for the stock’s price appreciation in the near term.

Let’s now delve deeper into JLL’s strengths.

Reasons to Buy

Robust Scale: JLL is focused on balanced revenue growth across profitable markets. Also, its superior client services and strategic investment in technology and innovation are expected to help grow its market share and win relationships, thereby helping the company achieve notable growth as well as a decent cash level. In fact, over the past several years, JLL has completed several strategic acquisitions as part of its global growth strategy, thereby expanding its capabilities in a number of service offerings and boosting presence in key regional markets. Though the pandemic had an adverse impact on transaction-based service lines, improvements are showing up in pipelines in both leasing and capital markets, which is encouraging.

Recovery in the Real Estate Market: After a dismal 2020, the global economy witnessed modest growth in the first quarter this year, though it was concentrated in a small number of large economies. The acceleration of vaccination programs as well as government stimulus programs across the globe have, however, set the stage for recovery, with anticipations of robust growth in the rest of 2021 as pent-up demand starts to resurface. This is leading to a significant recovery in investor sentiment.

In addition, key global central banks are expected to continue keeping short-term policy rates at low levels, thereby supporting the real estate industry. And as the economy continues to recover, the overall demand for the real estate is also getting a boost. According to a report from JLL, investment sales continued to show signs of recovery this January-March quarter, with global volumes declining 13% compared with the prior-year quarter, after a 21% fall in fourth-quarter 2020 and 44% in third-quarter 2020, reflecting liquidity and capital flows’ steady improvement.

Given JLL’s broad range of real estate products and services as well as an extensive knowledge of domestic and international real estate markets, the company is well poised to bank on favorable trends.

Growing Outsourcing Business: JLL’s Corporate Solutions business, the company’s multi-service outsourcing business, and includes integrated Facility Management and Corporate Solutions-related services from Leasing, Project & Development, as well as Advisory & Consulting, is well poised to bank on the favorable trends. In fact, amid rising trend of outsourcing of real estate needs by companies, new contract wins and expansion of services with existing clients are likely to aid JLL’s performance in the upcoming period. Also, amid the pandemic, Corporate Solutions continued to show its resiliency as a scaled global platform and the business continues to generate new client wins and expansions, which includes advising on reentry strategies and protocols.

Strong Balance Sheet and Superior Return on Equity (“ROE”): JLL is focused on maintaining balance-sheet strength and adequate liquidity to enjoy operational flexibility. The company exited first-quarter 2021 with $2.9 billion of liquidity, with 87% available on its $2.75 billion revolving credit facility. Notably, in April, JLL announced the amendment of its bank credit facility to maintain the company's operating flexibility and support its growth strategy. The company renewed the credit facility under basically the same terms but extending the maturity date 3 years to April 2026.

The company also enjoys investment grade ratings — Moody’s: Baa1 and S&P: BBB+ — which highlights the financial and balance-sheet strength. Apart from this, JLL’s ROE is 10.7% compared with the industry average of 4.03%. This highlights that the company reinvests more efficiently compared to the industry. Hence, with a solid balance sheet and sufficient financial flexibility as well as manageable debt maturities, JLL is well poised to sail through the challenging times and capitalize on solid opportunities.

Other Key Picks

Realogy Holdings Corp. RLGY carries a Zacks Rank of 2 (Buy), presently. The Zacks Consensus Estimate for 2021 earnings per share moved 21.3% north over the past two months to $2.62, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cushman & Wakefield plc CWK currently carries a Zacks Rank of 2. The Zacks Consensus Estimate of the company’s current-year earnings per share has been revised nearly 8% upward over the past two months to $1.22.

FirstService Corporation’s FSV earnings estimate for the ongoing year moved marginally north to $3.86 over the past 60 days. It currently carries a Zacks Rank of 2.

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Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report

FirstService Corporation (FSV) : Free Stock Analysis Report

Realogy Holdings Corp. (RLGY) : Free Stock Analysis Report

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

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