The Real Deal New York

Cushman stock price climbs as analysts begin coverage with bullish outlook

Six brokerages rated it a “buy”
August 30, 2018 08:30AM

Brett White and Cushman and Wakefield at 225 Wacker Drive in Chicago (Credit: 225WestWacker)

Stock analysts began their coverage of Cushman & Wakefield with a largely bullish outlook on the newly public company.

At least six brokerages started their coverage of the Chicago-based firm with ratings equivalent to a “buy,” MarketWatch reported Wednesday.

The stock analysts cited Cushman’s competitive market position as one of the three global real estate service firms alongside CBRE and JLL.

“Less than half of the addressable market is currently outsourced to real estate providers such as Cushman,” wrote Credit Suisse analyst Douglas Harter.

A note from financial services firm William Blair pointed out that Cushman generates more revenue than its main competitors — about 47 percent, or a third of adjusted EBITDA — from clients outsourcing services, a growing revenue stream for brokerages.

Cushman’s stock price rose 1.5 percent to $17.92 on Monday, according to MarketWatch. That was about 5 percent above its initial public offering price of $17 per share on August 1.

Analysts at Morgan Stanley said they expect Cushman to show higher-than-anticipated revenue growth and margin expansion, “[d]espite late cycle concerns.”

But William Blair noted that the large levels of debt private-equity owner TPG Group loaded on to Cushman could hinder the company when trying make certain mergers and acquisitions.

And JPMorgan analyst Anthony Paolone wrote in a note that, ““We don’t see liquidity issues with Cushman running at its higher leverage level, but we do think that to the extent business trends were to weaken, it would exacerbate the downside.” [MarketWatch] — Rich Bockmann