Cushman & Wakefield Earnings: Improved Outlook, Upbeat Commentary Led to a 15% Jump in Stock Price

No-moat-rated Cushman & Wakefield reported a decent set of numbers in the third quarter, but an improved outlook for the brokerage business and upbeat management commentary led to a 15% jump in its stock price after the results were announced. The leasing business continues to perform relatively well, while the capital markets revenue is expected to recover sharply in the upcoming quarters as interest rates decline and transaction activity picks up. Management guided for revenue growth of around 20% in the capital markets business in the fourth quarter that was materially higher than the Street's expectations. A soft landing seems to be the most likely scenario in the upcoming year, which should lead to good performance for the commercial real estate brokerage industry. Shares have rallied by around 50% since June 2024 on an improved outlook for the industry but are still trading around 10% lower than our fair values estimate. We do not plan on changing our $17 per share fair value estimate for the firm as we incorporate third-quarter results.