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 34.1%, outperforming its industry’s growth of 29.7%.
In recent quarters, the company benefited from an improvement in its transactional revenues and continued strength in its resilient lines of business. JLL also gained from its cost management efforts.
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 2024 EPS has moved 1.5% north to $13.37 per share. Also, estimates for 2025 EPS have moved up over the same period.
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The fundamentals appear solid for this Zacks Rank #2 (Buy) 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.
Let’s now delve into JLL’s strengths.
Reasons to Buy JLL Stock
Robust Scale: JLL is focused on balanced revenue growth across profitable markets. Its superior client services and strategic investment in technology and innovation are expected to help grow market share and win relationships. Over the past years, JLL has completed several strategic acquisitions as part of its global growth strategy, expanding its capabilities in several service offerings and boosting its presence in key regional markets.
Moreover, JLL's diversified and resilient platform and cost optimization efforts are expected to support its adjusted EBITDA. Given strong performance in the first nine months of 2024, management projects 2024 adjusted EBITDA in the range of $1.15-$1.20 billion, up from $1.0-$1.2 billion guided earlier. We expect fee revenues to increase 4.4% and 1% year over year in 2024 and 2025, respectively. We expect adjusted EBITDA to increase 56.7% in 2024, 19% in 2025 and 21.3% in 2026 on a year-over-year basis.
Technology Platform: JLL’s data-driven and experiential technology platform is providing a competitive edge and leading to increased client engagements, which is encouraging. Although the company expects revenue growth pressure in the near term in this segment, it remains encouraged by the long-term growth opportunity of its JLL Technologies business.
In November 2024, JLL announced a joint venture with Slate Asset Management to launch a software-as-a-service (SaaS) technology platform, JLL Asset Beacon. This platform integrates data across asset management functions, offering a real-time, comprehensive view of performance for a single asset, a fund or the entire portfolio.
Rise in Outsourcing Business: JLL’s Work Dynamics segment offers a single and cohesive team to clients to bring together services across its service lines and is well-poised to benefit from favorable trends in the outsourcing business. Corporations are looking for the company’s wide-ranging knowledge and breadth of its services, including sustainability.
Moreover, in the post-pandemic period, this trend for organizations to outsource real estate services while progressively looking for strategic advice on reimagining their workspaces and workstyles to boost culture, attract talent and drive performance has gathered more strength. Amid the rising trend of outsourcing real estate needs by companies, new contract wins and the expansion of services with existing clients are likely to aid JLL’s performance in the upcoming period. We expect a year-over-year increase of 13.7% in JLL’s Work Dynamics' total revenues in 2024.
Strong Balance Sheet & Superior Return on Equity: JLL is focused on maintaining balance sheet strength and adequate liquidity to enjoy operational flexibility. The company exited the third quarter of 2024 with $3.39 billion of corporate liquidity and a net leverage of 1.4X. Over the medium term, the company expects to operate the business toward the net leverage range of 0.0-2.0X.
JLL also enjoys investment grade ratings, such as Baa1 from Moody’s and BBB+ from S&P Global, which highlight financial and balance sheet strength, enabling the company to borrow at a favorable rate. JLL’s return on equity is 8.95% compared with the industry average of 1.54%. This highlights that the company reinvests more efficiently compared with the industry. With a solid balance sheet and financial flexibility, JLL is well-poised to sail through any challenging times and capitalize on solid opportunities.
Other Stocks to Consider
Some other top-ranked stocks from the real estate operations sector are CBRE Group, Inc. CBRE and FirstService Corporation FSV. CBRE Group and FirstService Corporation each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for CBRE Group’s 2024 EPS has increased 5.9% over the past two months to $4.99.
The Zacks Consensus Estimate for FirstService Corporation’s current-year EPS of $4.99 indicates a 4.2% rise year over year.
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Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report
FirstService Corporation (FSV) : Free Stock Analysis Report
CBRE Group, Inc. (CBRE) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
