Jones Lang LaSalle JLL offers a wide range of real estate products and services. It is well-poised to benefit from solid industry fundamentals, strategic acquisitions and a robust balance-sheet position.
JLL’s extensive knowledge of domestic and international real estate markets enables it to operate as a single-source provider of real estate solutions. This helps it to enjoy a robust scale. Its focus on balanced revenue growth across profitable markets and superior client services is likely to help it grow its market share and acquire new clients.
The global capital is well-poised to grow given the post-pandemic economic recovery and high levels of liquidity. A significant amount of capital is yet to be deployed in the commercial real estate space, and a rise in cross-border capital flows augurs well for the capital market’s growth. With an encouraging capital market pipeline, JLL is likely to capitalize on this upbeat trend.
Moreover, with the rising trend of outsourcing real estate needs by companies, new contract wins and the expansion of services with existing clients are likely to aid JLL’s Work Dynamics segment’s performance in the upcoming period.
To enhance its global growth strategy and expand its capabilities in certain service offerings, JLL has been making strategic acquisitions. In June 2022, JLL closed the acquisition of Metropolitan Valuation Services, through which it added 20 valuation professionals to strengthen its valuation advisory segment.
JLL enjoys a robust balance-sheet position with ample liquidity. As of Jun 30, 2022, it had $1.9 billion of liquidity and a net leverage ratio of 1.0. Also, its investment grade credit ratings give it favorable access to the debt market. Such strong financial footing aids its expansion efforts and poises it well to sail through challenging times.
However, the emergence of new variants of Covid-19 and interruption in business activities have made customers delay the timeline of their transactions. This adversely impacts JLL’s transaction-based service lines. Also, the risks associated with market volatility and interest rate hikes are likely to pose operating challenges in the near term.
JLL has an extensive international presence. Therefore, it is subject to unfavorable foreign currency movement, rising geopolitical tension and uneasiness in some economies, which affect its top line. The recent military conflict between Russia and Ukraine has exposed its operations in Europe to greater risks and has led to a fall in leasing inquiries in certain markets.
Analysts seem bearish on this Zacks Rank #3 (Hold) stock. The Zacks Consensus Estimate for the company’s 2022 earnings per share (EPS) has been revised marginally downward over the past month to $18.90.
Shares of JLL have lost 11.4% compared with the industry’s decline of 7.1% in the past three months.
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Stocks to Consider
Some better-ranked stocks from the real estate operations sector are KE Hodlings BEKE and Colliers International Group CIGI.
The Zacks Consensus Estimate for KE Hodlings’ current-year EPS has moved 35.7% upward in the past week to 19 cents. BEKE carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Colliers International Group’s ongoing year’s EPS has been raised 4% over the past month to $7.50. CIGI currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
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