Cushman & Wakefield Earnings: Services Segment Performance Continues to Fall Behind Rivals

No-moat-rated Cushman & Wakefield reported a middling set of numbers in the second quarter as leasing revenue recovered reasonably well, capital markets revenue showed signs of stabilization, but services revenue continued to fall behind its larger rivals. The company reported adjusted EPS of $0.20 per share in the second quarter, down 9% from $0.22 per share of adjusted earnings in the second quarter of 2023. The companywide fee revenue was down 2% in the current quarter on a local currency basis compared with the previous year as it was reported at $1.58 billion. Adjusted EBITDA came in at $139 million, 4% lower compared with the second quarter of 2023 on a local currency basis driven primarily by decreased capital markets activity that was partially offset by higher leasing volume and cost-saving initiatives. This resulted in an adjusted EBITDA margin of 8.8% for the quarter, down 10 basis points compared with the second quarter of last year. We do not plan on changing our $17 per share fair value estimate for the firm as we incorporate the second-quarter results.