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Stock Strategist

Investors Too Pessimistic About JLL's Prospects

Despite a tough quarter, we think the commercial real estate broker is undervalued.

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Jones Lang LaSalle’s (JLL) second-quarter results demonstrate the dramatic nature of investment volume declines in the commercial real estate industry. Companywide fee revenue for the quarter was $1.2 billion, a 22% decline from the second quarter of 2019. The decline was driven by weak performance from the capital markets and leasing businesses, with outsourced corporate solutions displaying resilience.

The current environment presents significant uncertainty for Jones Lang LaSalle, with the transaction-based nature of many of its business lines amplifying risk. But despite the deterioration in performance, we are maintaining our $168 fair value estimate for the narrow-moat-rated company, as we have already incorporated a period of near-term weakness into our valuation model.

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Yousuf Hafuda does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.