CBRE

Based on a comprehensive analysis of CBRE Group, the outlook is cautiously optimistic, leaning towards a positive recommendation.

Technical & Fundamental Outlook The stock demonstrates strong recent momentum, significantly outperforming the market and showing a clear recovery trend. This positive technical picture is supported by solid fundamental improvements, including robust quarter-over-quarter revenue growth and a substantial expansion in net profit margin. The company’s financial health is sound, with a conservative debt level and strong interest coverage.

Valuation & Risk Assessment Valuation presents a mixed view. While standard multiples like P/E appear high, the very attractive PEG ratio of 0.46 suggests the stock is undervalued relative to its growth potential. The primary risks involve its above-market volatility and sensitivity to economic cycles affecting the commercial real estate sector, though the low short interest indicates a lack of strong negative sentiment.

Recommendation CBRE appears to be a worthwhile consideration for investors seeking exposure to a leading global real estate services firm. The combination of strong operational momentum, healthy finances, and growth-adjusted value offsets its premium absolute valuation and inherent cyclical risks. Investors should be prepared for volatility, but the company's market position and improving profitability support a positive outlook.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on a comprehensive analysis, the 12-month outlook for CBRE is cautiously optimistic. Key near-term catalysts include continued execution on its strong operational momentum and revenue growth, leveraging its leading global platform as the commercial real estate market stabilizes. The primary risk remains its high sensitivity to macroeconomic cycles, particularly any downturn that could delay a recovery in property transactions and consulting services. While a specific analyst target is unavailable, the highly attractive PEG ratio of 0.46 suggests significant growth-adjusted value, supporting a positive view that the stock could appreciate from its current price of $164.71, though investors should expect volatility inherent to the sector.

Wall Street Consensus

Most Wall Street analysts are optimistic about CBRE's 12-month outlook, with consensus target around $164.90, indicating expected upside potential.

Overall, CBRE has investment potential but also faces challenges. Here are key factors to weigh before investing.

CBRE has demonstrated strong positive performance with significant recovery momentum over the past year, substantially recovering from its 52-week low. The stock has shown notable outperformance against the broader market in recent months, though it remains moderately volatile based on its beta.

Over the short term, CBRE has delivered solid gains with 2.65% and 8.03% returns over one and three months respectively, significantly outperforming the market by 4.66% over the quarterly period. This consistent upward trajectory indicates strong recent momentum and buyer interest in the stock despite its above-market volatility.

Currently trading at $164.71, CBRE sits approximately 96% of the way toward its 52-week high of $171, positioning it near the upper end of its yearly range. While not technically overbought yet, the stock faces limited immediate upside to its recent peak given its proximity to the high, suggesting potential resistance ahead.

Revenue & Profitability CBRE demonstrated solid revenue growth, increasing from $9.75 billion in Q2 to $10.26 billion in Q3 2025. Profitability improved significantly with net income rising from $215 million to $363 million quarter-over-quarter, while net profit margin expanded from 2.2% to 3.5%. The company maintained stable operating efficiency with operating income ratio improving to 4.7% in Q3.

Financial Health The company maintains a conservative capital structure with a low debt ratio of 28.2% and debt-to-equity of 0.94, indicating manageable leverage. Interest coverage of 9.62x demonstrates strong ability to service debt obligations. However, the current ratio of 1.13 suggests adequate but not exceptionally strong short-term liquidity positioning.

Operational Efficiency CBRE shows moderate operational efficiency with an asset turnover of 0.36, reflecting the capital-intensive nature of real estate services. Return on equity of 4.3% indicates reasonable but not exceptional returns for shareholders. The cash conversion cycle of approximately 20 days demonstrates effective working capital management.

CBRE's current valuation metrics present a mixed picture. The trailing P/E of 46.33 and forward P/E of 32.3 appear elevated, signaling a premium valuation, particularly when combined with a high price-to-book ratio of 5.58. However, the price-to-sales ratio of 1.31 is more moderate, and most notably, the PEG ratio of 0.46 suggests the stock is potentially undervalued when its earnings growth prospects are factored in, though the exceptionally high EV/EBITDA of 79.52 is a significant concern.

Without industry average data for a direct peer comparison, a definitive assessment versus the commercial real estate services sector is not possible. However, such elevated multiples, especially the EV/EBITDA, are typically associated with high-growth expectations. The key takeaway is the conflicting signal between the high absolute ratios and the attractive PEG ratio, indicating that future growth is critical to justifying the current price.

Volatility Risk: CBRE's beta of 1.345 indicates it is moderately more volatile than the broader market, suggesting heightened sensitivity to market swings. The 1-year maximum drawdown of -22.56% illustrates the stock's potential for significant price declines during adverse periods, implying considerable volatility risk for investors.

Other Risks: The negligible short interest suggests minimal speculative pressure or negative near-term sentiment from short sellers. However, as a global real estate services firm, CBRE remains exposed to macroeconomic risks such as interest rate fluctuations and commercial real estate market cyclicality, which heavily influence its transactional and consulting revenue.