Analyst Note| Kevin Brown |
Narrow-moat-rated CBRE Group reported solid first-quarter earnings, comfortably beating the FactSet consensus estimate of $0.67 in earnings per share with reported adjusted EPS of $0.86. The company reported first-quarter companywide net revenue of $3.35 billion, a 2% decrease from $3.43 billion during the first quarter of 2020, though adjusted EBITDA increased on a year-over-year basis to $491 million, 14% higher than the $430 million in the same period last year. These results are on the back of a rapidly recovering commercial real estate market that was essentially brought to a grinding halt a year ago. We are increasingly seeing evidence of a broad-based recovery in the commercial real estate sector as mass vaccination develops herd immunity in the public and the end of the pandemic appears to be in sight. We do not plan to materially change our $73 fair value estimate as we fully incorporate the first-quarter results.