CBRE's Capital Markets Revenue Declines Sharply in Q4, but Outsourcing Remains Resilient

Narrow-moat-rated CBRE Group’s fourth-quarter results were largely in line with our expectations, as rising interest rates weighed on the capital markets business but the outsourcing business remained resilient. The company reported core earnings per share of $1.33 in the fourth quarter, beating the FactSet consensus estimate of $1.19. Core EPS declined 26% from the year-ago quarter. Companywide net revenue was reported at $5.0 billion, an 11% decrease from the same quarter last year. Core EBITDA came in at $668 million, about 30% lower compared with the previous year. We are maintaining our $90 fair value estimate after incorporating fourth-quarter results.