Cushman & Wakefield Earnings: Brokerage Holds Up Well While Services Revenue Disappoints

No-moat-rated Cushman & Wakefield reported a mixed set of numbers in the first quarter as leasing revenue recovered reasonably well, capital markets revenue was in line with our expectations, but services revenue came in lower than expected. The company reported adjusted EPS of $0.00 per share in the first quarter, up from a negative $0.04 per share of adjusted earnings in the first quarter of 2023. The companywide fee revenue was flat in the current quarter on a local-currency basis compared with the previous year, as it was reported at $1.50 billion. Adjusted EBITDA came in at $78 million, 29% higher compared with the first quarter of 2023 on a local-currency basis, driven primarily by higher leasing volume and cost-savings initiatives. This resulted in an adjusted EBITDA margin of 5.2% for the quarter, up 120 basis points compared with the first quarter of last year. We do not intend to change our $17 per share fair value estimate for the firm as we incorporate the first-quarter results.