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Why Is Jones Lang LaSalle (JLL) Up 3.6% Since Last Earnings Report?

A month has gone by since the last earnings report for Jones Lang LaSalle (JLL). Shares have added about 3.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Jones Lang LaSalle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Jones Lang's Q1 Earnings & Revenues Beat Estimates

JLL reported first-quarter 2024 adjusted EPS of $1.78, beating the Zacks Consensus Estimate of 85 cents. The reported figure increased significantly from the prior-year quarter.

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Results reflected better-than-anticipated revenues. The company benefited from the continued strength in its resilient lines of business. Though the quarter saw a rise in most transaction-based businesses, the JLL Technologies and LaSalle segments witnessed poor performance, affecting the results to some extent.

Revenues of $5.12 billion increased 8.7% from the year-ago quarter’s $4.72 billion and surpassed the Zacks Consensus Estimate of $4.94 billion.

Per Christian Ulbrich, CEO of JLL, “JLL’s strong start to 2024 was driven by growth in both our resilient and transactional business lines. In addition, the impact of our cost actions over the last year allowed us to meaningfully improve our profitability while still investing in our business to take advantage of growth opportunities ahead.”

Segment-Wise Performance

During the first quarter, the Markets Advisory segment’s revenues came in at $950.1 million, reflecting a year-over-year gain of 4.8% (in USD). The rise was mainly due to an increase in Property Management and U.S. Leasing revenues. Property Management revenue grew on the back of portfolio expansions carried out in the United States, the U.K. and Canada. U.S. Leasing growth was led by the office sector, which saw increased deal size and transaction volumes.

Revenues for the Capital Markets segment were $377.6 million, increasing 5.7% (in USD) year over year. The rise was mainly due to an increase in JLL’s Investment Sales and Debt/Equity Advisory revenues year over year across most asset classes, with strength in Japan and Germany, which was most notable in offices.

JLL’s Work Dynamics segment reported revenues of $3.64 billion, up 11.1% (in USD) year over year. This uptick was driven by continued strong performance in Workplace Management. Its 2023 contract wins and mandate expansions in the Americas have supported Workplace Management’s growth.

JLL Technologies segment reported revenues of $53.9 million, declining 12.2% (in USD) from the prior-year quarter levels. The fall was partially due to lower contract signings in the second half of 2023. Moreover, the lower revenues reflected delayed decisions on technology spend from existing solutions clients, which included certain contract renewals.

The revenues in the LaSalle segment fell 9.6% (in USD) year over year to $103.4 million. The decline in revenues was mainly due to lower advisory fees. This is further attributable to valuation declines in assets under management and lower fees in Europe as a result of structural changes to a lower-margin business.

As of Mar 31, 2024, LaSalle had $89.7 billion of real estate AUM, down from $93.5 billion as of Mar 31, 2023. This resulted from decreases in net valuation and foreign currency and dispositions and withdrawals, partially offset by the rise in acquisitions and uncalled committed capital and cash.

Balance Sheet

JLL exited the first quarter with cash and cash equivalents of $396.7 million, down from $410 million as of Dec 31, 2023.

As of Mar 31, 2024, the net leverage ratio was 1.9, up from 1.2 as of Dec 31, 2023, but down from 2.0 as of Mar 31, 2023. The corporate liquidity was $2.3 billion as of the first quarter's end.

The company repurchased 110,726 shares during the reported quarter for $20.1 million. As of Mar 31, 2024, $1,073.5 million remained authorized for repurchase under the share repurchase program.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Jones Lang LaSalle has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Jones Lang LaSalle has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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