Newmark Group stock initiated with Market Outperform rating at Citizens JMP

Investing.com - Citizens JMP initiated coverage on Newmark Group , Inc. (NASDAQ:NMRK) with a Market Outperform rating and a price target of $17.00 on Monday. According to InvestingPro data, the stock currently trades below its Fair Value, with analysts setting targets between $14 and $16.

The firm identified Newmark as its top pick in the sector, citing expectations that the real estate services company will outpace peers in market share gains due to recent hiring initiatives of established producers with long-term contracts.

Citizens JMP also highlighted the removal of an ownership overhang following the cleanup of shares previously held by former executive chairman Howard Lutnick, who is now the U.S. Secretary of Commerce, noting this was executed with bottom-line benefits.

Recent investments by Newmark in Europe and Asia could unlock new revenue streams in underpenetrated regions, according to the research firm’s analysis.

The firm pointed out that Newmark currently trades at 8.6x next-twelve-months earnings per share, representing a wider discount to the sector average of approximately 20x compared to historical trends, suggesting potential for outperformance given the company’s cleaner capital structure and anticipated acceleration in transaction-based revenues.

In other recent news, Newmark Group reported its first-quarter 2025 earnings, surpassing Wall Street expectations with an adjusted earnings per share of $0.21, exceeding the forecasted $0.19. The company’s revenue reached $665.5 million, outperforming the anticipated $613.2 million. These results reflect strong growth across leasing, capital markets, and management services revenues. In addition, Newmark facilitated a significant sublease for Zscaler (NASDAQ:ZS)’s new global headquarters in Santa Clara, California, marking the largest new office lease in Silicon Valley since 2023. The headquarters is expected to open in the summer of 2026, supporting Zscaler’s expansion.

Furthermore, Newmark repurchased a substantial portion of its shares from Howard W. Lutnick, the current U.S. Secretary of Commerce and the company’s former Executive Chairman. The buyback involved 10,969,523 Class A common shares at a total cost of approximately $127 million. Despite these developments, Newmark’s stock price fell by 3.48% in pre-market trading, influenced by broader market uncertainties. The company maintains a cautious outlook for 2025 due to macroeconomic conditions but expects continued revenue growth. Newmark’s strategic expansion into new services and markets, including Germany, has contributed to its enhanced market position, as noted by CEO Barry Gossam.

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