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On Thursday, Raymond (NSE:RYMD) James adjusted its price target for Cushman & Wakefield (NYSE:CWK) shares, reducing it from $16.00 to $15.00, while reaffirming an Outperform rating. The decision follows the company’s fourth-quarter 2024 financial results.
Patrick O’Shaughnessy, an analyst at Raymond James, noted the company’s brokerage revenue has positive momentum going into 2025. He also pointed out that Cushman & Wakefield’s free cash flow has shown improvement, and the firm’s net debt to EBITDA ratio has decreased to below 4x. These factors contribute to the analyst’s continued positive outlook on the stock.
However, the analyst also remarked on challenges facing the firm, such as the ongoing rationalization effort within its Services division and a lack of significant new client wins in 2023 and 2024. Additionally, Cushman & Wakefield’s brokerage revenue growth is trailing behind that of its peers.
O’Shaughnessy believes that the company’s investments aimed at narrowing this growth gap will pay off. However, he anticipates that these efforts may lead to a smaller margin expansion in 2025 than previously expected. Despite these concerns, the analyst suggests that the early stages of a cyclical rebound could lead to considerable earnings per share (EPS) growth for Cushman & Wakefield, presenting an attractive risk/reward scenario for investors.
In summary, Raymond James recognizes both the strengths and challenges for Cushman & Wakefield. The firm’s solid performance in brokerage revenue and improved financial metrics are weighed against the slower growth and ongoing investments that may affect short-term profitability. Nonetheless, the long-term perspective remains optimistic, with the expectation of a cyclical industry rebound benefiting the company.
In other recent news, Cushman & Wakefield reported strong fourth-quarter results that surpassed analyst expectations. The company achieved adjusted earnings per share of $0.48, exceeding the consensus estimate of $0.47. Revenue reached $2.6 billion, significantly higher than the projected $1.9 billion. Notably, Cushman & Wakefield’s Capital markets segment experienced a 35% year-over-year revenue increase to $247.5 million, attributed to robust results across all segments and increased investment sales activity. Leasing revenue also saw a 6% rise to $622.7 million, primarily driven by office leasing in the Americas. However, Services revenue experienced a 3% decline to $879.6 million. For the full year 2024, the company reported a net income of $131.3 million, a significant turnaround from a net loss of $35.4 million in 2023. Adjusted EBITDA rose by 2% to $581.9 million, and Cushman & Wakefield concluded the year with $1.9 billion in liquidity. CEO Michelle MacKay expressed optimism for 2025, citing improved investor and occupier sentiment.
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