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CBRE Group, Inc. (NYSE:CBRE) saw a decent share price growth of 12% on the NYSE over the last few months. The recent jump in the share price has meant that the company is trading around its 52-week high. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine CBRE Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for CBRE Group
What's The Opportunity In CBRE Group?
Great news for investors – CBRE Group is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $185.67, but it is currently trading at US$137 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because CBRE Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of CBRE Group look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. CBRE Group's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since CBRE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CBRE for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CBRE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.