Scotiabank cuts Colliers stock price target to $170, keeps rating

On Tuesday, Scotiabank (TSX:BNS)'s Himanshu Gupta adjusted the price target for Colliers International (NASDAQ:CIGI) shares, reducing it to $170.00 from the previous $172.50. With the stock currently trading at $144.23 and near its 52-week high of $156.96, the analyst maintained a Sector Outperform rating on the company's stock, which commands a market capitalization of $7.27 billion.

Gupta provided insight into the decision, noting a minor decrease in the 2025 EBITDA estimate by 1.5%. The target enterprise value to EBITDA (EV/EBITDA) multiple for 2026 remains unchanged at 13.25 times, which is slightly below the firm's Shadow CIGI. The revised estimates for 2025 indicate year-over-year growth of 12% in revenues, 16% in EBITDA, and 17% in adjusted earnings per share (EPS). According to InvestingPro data, the company has demonstrated solid performance with a current EBITDA of $567.34 million and revenue growth of 5.4% over the last twelve months.

The analyst elaborated on the growth potential of Colliers International, even under conservative assumptions. Gupta's bear case scenario, which does not factor in fund-raising in 2025, a muted recovery in Capital Markets, and no margin expansion, still projects a 12% year-over-year growth in EBITDA. For deeper insights into Colliers International's growth prospects and financial health (currently rated as GOOD by InvestingPro), subscribers can access the comprehensive Pro Research Report, available exclusively on the platform.

In conclusion, Gupta's analysis suggests that Colliers International is in a strong position to achieve double-digit growth across key financial metrics for the year 2025. The small adjustment in the price target reflects a slight recalibration of expectations while affirming confidence in the company's performance prospects.

In other recent news, Colliers International Group Inc. announced significant growth in its third-quarter earnings, with revenues rising by 11% to $1.2 billion and adjusted EBITDA increasing by 6% to $155 million. The company's assets under management also saw a substantial boost, growing by $2.4 billion to nearly $99 billion. These recent developments were further bolstered by successful acquisitions, including Englobe, which contributed to a 21% growth in the Engineering segment revenue.

JPMorgan initiated coverage on Colliers stock with a neutral rating, recognizing the company's strong history of growth through its middle-market-focused franchise. Goldman Sachs also initiated coverage on Colliers, assigning a neutral rating to the company and highlighting Colliers' strong strategy, particularly its focus on resilient revenue sources in the commercial real estate services sector.

Furthermore, Colliers has made strides in integrating sustainability into its business operations. The company recently filed a significant amendment to its sustainability-linked credit agreement, reflecting its ongoing commitment to align its financial strategies with environmental, social, and governance objectives.

Looking ahead, Colliers International projects mid- to high single-digit growth, supported by improving capital markets and ongoing acquisitions. The company also anticipates a 25% quarter-over-quarter increase in capital markets activity for the fourth quarter. However, a slight decline in the adjusted EBITDA margin to 13.1% was reported, attributed to higher insurance reserves and performance fees impact.

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