Morningstar | Despite Headline Risks, JLL Looks Like It Will Finish 2018 Within Target Range
Similar to other real estate service firms, Jones Lang LaSalle looks like it will have a fairly strong 2018, despite many of the headline risks that have made investors cautious. For the third quarter, the company reported an adjusted EBITDA margin of 14.7% compared with 13.2% a year ago. The operating margin expansion was a function of 12% fee revenue growth to $1.6 billion and a healthy $95 million of incentive fees booked in the company's asset-management segment related to Asia-Pacific dispositions. For the first nine months of the year, the adjusted EBITDA margin was 12.4% compared with 11.4% the previous year and a 2018 target of 12% to 14%. We don't anticipate making a material change to our $165 fair value estimate for wide-moat Jones Lang LaSalle and believe shares are fairly valued.There are economic risks in the headlines, but Jones Lang LaSalle should have a solid finish to 2018 and 2019 should be more of the same. Trade tensions and rising interest rates are commonly cited as reasons to be more cautious on real estate sector firms. However, Asia-Pacific fee revenue, where more of the trade tension currently exists, in the third quarter was only 16% of total fee revenue. Capital markets, which is more influenced by interest rates, was similarly 16% of fee revenue in the quarter. Even if the real estate market were to go into a downturn, the company's leasing, facilities management, and advisory services should be more resilient. Jones Lang LaSalle should even come out of any downturn stronger, as it has the capacity for acquisitive growth with a net debt/adjusted EBITDA ratio of 0.9 times. Even if we don't enter a downturn in the near term, the mere prospect of it could make firms more willing sellers.
Jones Lang LaSalle is a professional services firm that engages in real estate and investment management. The company delivers an array of services across four business segments. The company manage its Real Estate Services offerings across three geographic business segments: the Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific, and the company manages its investment management business globally as LaSalle Investment Management. In its Americas, EMEA and Asia Pacific operating segments, the company provides a range of leasing, capital markets, integrated property and facility management, project management, advisory, consulting, valuations and digital solutions services.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.