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CBRE Group (CBRE) Boosts Flexibility, Ups Credit Facility

CBRE Group, Inc. CBRE recently expanded its revolving credit facility from $3.15 billion to $3.5 billion by entering into a new five-year revolving credit agreement. The move is part of its efforts to boost liquidity position and flexibility.

Moreover, the facility comprises incentives associated with attaining certain sustainability goals by CBRE. These include increasing the company’s offices to more than 10,000 square feet that achieve sustainability certificates, procurement spending with sustainable suppliers and converting the North American vehicle fleet to electric vehicles.

Per Emma Giamartino, CBRE’s chief financial and investment officer, “The new facility enhances our capacity and flexibility to invest in CBRE’s growth while advancing our environmental, social and governance goals.”

CBRE recently reported second-quarter 2022 core earnings per share (EPS) of $1.83. The figure not only outpaced the Zacks Consensus Estimate of $1.38 but also improved 36.6% from the year-ago tally of $1.34.

Its quarterly results reflected the benefits of diversifying across asset types, business lines, client types and regions.

Further, CBRE Group ended the second quarter with $4.2 billion of total liquidity. This comprised $1.2 billion in cash in addition to the ability to borrow a total of $3.0 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.20 as of Jun 30, 2022, significantly less than CBRE’s primary debt covenant of 4.25X. CBRE Group’s focus on maintaining a solid balance sheet and ample liquidity aids its expansionary endeavors.

In the second quarter, it completed three in-fill acquisitions for a total of $42.2 million in cash and deferred consideration. These included a property evaluation and advisory firm in New Zealand, a property advisory consultant in Scotland and a sustainability advisory specialist in France.

Shares of CBRE have outperformed the industry it belongs to in the past three months. Its shares gained 6.7% compared with the industry’s growth of 5.3%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

However, analysts seem bearish about this Zacks Rank #4 (Sell) stock. The estimate revisions trend for 2022 EPS does not indicate a favorable outlook for the company as it has been revised 2.4% downward in the past month to $6.05.

Stocks to Consider

Some better-ranked stocks from the real estate sector are KE Hodlings BEKE and FirstService FSV.

The Zacks Consensus Estimate for KE Hodlings’ 2022 EPS has moved 40% upward in the past two months to 7 cents. BEKE carries a Zacks Rank of 2 (Buy) currently.

The Zacks Consensus Estimate for FirstService’s current-year EPS is pegged at $4.28. The consensus mark for 2022 revenues stands at $3.7 billion, implying a growth of 12.2% year over year. FSV sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.


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