Shares of Jones Lang LaSalle JLL, better known as JLL, have been displaying a solid run on the bourse in the past six months. The stock has appreciated 22.4% against its industry’s decline of 5.8%.
Image Source: Zacks Investment Research
A positive estimate revision trend reflects optimism for the company’s earnings growth prospects. Over the past month, the Zacks Consensus Estimate for JLL’s 2021 and 2022 earnings have moved 4.7% and 5.6% north, respectively, to $16.13 and $17.24.
The fundamentals appear solid for this Zacks Rank #1 (Strong Buy) JLL stock. Also, there is enough scope for the stock’s price appreciation in the near term and any hiccup might offer a good entry point.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s now delve into JLL’s strengths.
Reasons to Buy
Robust Scale: JLL is focused on its balanced revenue growth across profitable markets. Its superior client services and strategic investments in technology and innovation are expected to help its market share increase and win relationships, and help to achieve notable growth and a decent cash level. Over the past years, JLL has completed several strategic acquisitions as part of its global growth strategy, thereby expanding its capabilities in several service offerings and boost presence in key regional markets. Though the pandemic had an adverse impact on transaction-based service lines, improvements in pipelines, in both leasing and capital markets, are encouraging.
Recovery in the Real Estate Market: The acceleration of vaccination programs and government stimulus programs across the globe have kept supporting the economic rebound. During the third quarter, the global capital markets transaction volumes aggregated $292 billion, denoting a 77% jump from the year-ago level. With the increased competition and ample capital directing toward commercial real estate, pricing is getting a boost. Also, several commercial real estate segments showing operational resilience, liquidity and capital flows remain steady. Given JLL’s broad range of real estate products and services, and an extensive knowledge of domestic and international real estate markets, the company is well poised to bank on favorable trends.
Rise in Outsourcing Business: JLL’s Corporate Solutions business, which is the company’s multi-service outsourcing business, includes integrated Facility Management and Corporate Solutions-related services from Leasing, Project & Development, and Advisory & Consulting, is well poised to capitalize on favorable trends. Amid the rising trend of outsourcing of real estate needs by companies, new contract wins and expansion of services with the existing clients are likely to aid JLL’s performance in the upcoming period. Corporations are interested in the company’s wide-ranging knowledge and the breadth of its services, including sustainability. Amid the pandemic, Corporate Solutions continued to show its resilience as a scaled global platform with its business continuing to generate new client wins and expansions along with an advice on reopening the workplace. Effective June 2021, JLL renamed its Corporate Solutions business to JLL Work Dynamics.
Strong Balance Sheet and Superior Return on Equity (ROE): JLL is focused on maintaining its balance-sheet strength and adequate liquidity to enjoy operational flexibility. The company exited the third quarter of 2021 with a leverage of 0.4X and $3.1 billion of liquidity. As of Sep 30, 2021, the company’s net debt amounted to $487.3 million, marking a decrease of $161.3 million from the prior quarter’s figure and a decline of $264.6 million from the year-ago quarter’s end.
JLL also enjoys investment grade ratings, such as Moody’s: Baa1 and S&P’s: BBB+ — which highlight the financial and balance-sheet strength, enabling the company to borrow at a favorable rate. JLL’s ROE is 14.54% compared with the industry average of 4.98%. This highlights that the company reinvests more efficiently compared to the industry. Hence, with a solid balance sheet and sufficient financial flexibility, and manageable debt maturities, JLL is well poised to sail through the challenging times and capitalize on solid opportunities.
Other Key Picks
Some other key picks from the REIT sector include CBRE Group, Inc. CBRE, Cushman & Wakefield plc CWK and Kennedy-Wilson (NYSE:KW) Holdings, Inc. KW.
CBRE Group Inc (NYSE:CBRE). carries a Zacks Rank of 2 (Buy) at present. Its 2021 earnings per share is expected to increase 62.1% year over year.
The Zacks Consensus Estimate for CBRE Group’s 2021 earnings per share has been revised 7.5% upward in a month.
The Zacks Consensus Estimate for Cushman & Wakefield’s ongoing-year earnings per share has moved 10.3% north to $1.60 over the past month. Its long-term growth rate is projected at 10%.
The Zacks Consensus Estimate for Cushman & Wakefield’s 2021 earnings per share suggests an increase of 97.5% year over year. Currently, CWK carries a Zacks Rank of 1.
Kennedy-Wilson holds a Zacks Rank of 2 at present. Its 2021 earnings per share is expected to increase 58.3% year over year.
The Zacks Consensus Estimate for Kennedy-Wilson’s 2021 earnings per share has been revised 12.4% upward in a month to $3.45.
Investor Alert: Legal Marijuana Looking for big gains?
Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0%
You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jones Lang LaSalle Incorporated (JLL): Free Stock Analysis Report
KennedyWilson Holdings Inc. (KW): Free Stock Analysis Report
CBRE Group, Inc. (CBRE): Free Stock Analysis Report
Cushman & Wakefield PLC (CWK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research