Portfolio: Zacks Focus List

CBRE is the largest global commercial real-estate services firm, with a scaled platform across leasing, capital markets, outsourcing, investment management and development that increasingly tilts toward fee-based, recurring “resilient” revenue rather than purely transactional fees. Over the last decade, its Global Workplace Solutions and other contracted-service lines have grown to contribute the majority of sales, improving earnings stability and free-cash-flow conversion while preserving upside from higher-margin, cyclical brokerage and development activity when markets are strong.

The outlook is for mid- to high-single-digit core EPS growth over the cycle, with potential upside if transaction volumes and development recover alongside a more benign interest-rate backdrop. Management targets materially higher EPS by 2028 supported by operating leverage, selective M&A, and aggressive share repurchases funded by strong free cash flow, but results remain sensitive to commercial-property values, capital-markets activity, and credit conditions, which can drive meaningful year-to-year volatility. However, given that shares have had a healthy -20% correction from the recent highs, we believe a good portion of the realized volatility is already removed at today’s price.