CBRE: EPS has bottomed

We like the commercial real estate brokers as a way to play expected normalizing in the CRE market aided by falling rates

• Q2’24 was the confirmation that the bottom is in.

• After two years of earnings declines, Q2’24 was the first quarter when earnings were flat yoy and CBRE beat in all segments

• 60% of Profit comes from a relatively high-quality compounding service business, which differentiates it from peers JLL and CWK

• We find M&A and capital deployment an attractive part of CBRE giving compounding returns and estimate an 18-20% EPS CAGR over the next 4 years.

Potential Upside:     $145 (+29%)

Sensible Downside: $90 (-20%)

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