CBRE: Gradual Brokerage Recovery And Buybacks Will Drive Future Upside

Analysts have modestly increased their price target on CBRE Group, lifting fair value from approximately $175.45 to $180.50 per share. They cite a continuing but moderating recovery in U.S. real estate brokerage activity as the primary reason for this adjustment.

Analyst Commentary

Recent revisions to price targets reflect a nuanced view of CBRE Group's prospects, balancing an improving transaction environment with concerns about the pace and durability of the recovery. Analysts emphasize that the current valuation largely embeds expectations for continued progress in brokerage activity and disciplined capital allocation.

Bullish Takeaways

• Bullish analysts highlight that the gradual uptick in U.S. real estate brokerage volumes supports mid single digit to high single digit revenue growth assumptions over the next year, underpinning the higher fair value range.
• Improving operating leverage as transaction activity normalizes is expected to support margin expansion, which in turn justifies a modest re rating of the earnings multiple.
• Analysts point to CBRE Group's diversified services platform as a key advantage, helping to stabilize earnings across cycles and support more predictable free cash flow generation.
• Stronger capital discipline and a focus on high return segments are seen as catalysts for sustained earnings growth. This supports the view that current share levels remain below long term intrinsic value.

Bearish Takeaways

• Bearish analysts view the recovery in U.S. brokerage activity as moderate rather than robust. They caution that near term earnings growth may trail the pace implied by richer valuation multiples.
• There is concern that a slower transaction environment in certain commercial segments could limit upside to current forecasts, particularly if interest rates remain higher for longer.
• Some analysts argue that the stock already prices in a healthy recovery scenario. This leaves less room for multiple expansion and increases sensitivity to any execution missteps.
• Uncertainty around the timing of a full cycle rebound in office and other challenged asset classes is cited as a risk that could cap upside to both earnings and the share price target.

What's in the News

• Completed its multi year share repurchase program announced in November 2021, buying back a total of 41,886,056 shares, or 13.49% of shares outstanding, for approximately $3.9 billion, with no additional repurchases in the quarter ended September 30, 2025 (company disclosure).
• Reaffirmed capital allocation priorities on the third quarter 2025 earnings call, emphasizing mergers and acquisitions and co investment in Real Estate Investments as the primary use of capital, with remaining free cash flow allocated to share repurchases (earnings call).
• CFO Emma Giamartino stated that CBRE views its share price as undervalued and will continue buybacks in the absence of suitable M&A opportunities, while remaining patient and selective in pursuing well operated targets that benefit from secular tailwinds and CBRE's global platform (earnings call).

Valuation Changes

• Fair Value Estimate has risen slightly from approximately $175.45 to $180.50 per share, reflecting a modestly more constructive outlook on CBRE Group's earnings power.
• Discount Rate has increased slightly from about 9.19% to 9.30%, implying a marginally higher required return and risk premium in the valuation model.
• Revenue Growth Assumption is effectively unchanged, holding near 9.77%, indicating no material shift in top line expectations.
• Net Profit Margin Assumption is essentially flat, remaining close to 4.68%, suggesting stable views on underlying profitability.
• Future P/E Multiple has risen slightly from roughly 26.7x to 27.6x, signaling a modestly higher valuation placed on forward earnings.