7. Cushman & Wakefield plc (NYSE:CWK)
Number of Hedge Fund Investors: 22
Forward P/E ratio as of August 10: 14.19
Cushman & Wakefield plc (NYSE:CWK) is a global full-service commercial real estate company with over 100 years of experience, 52,000 employees, and 400 offices worldwide. The company is one of the largest commercial real estate services firms globally and is valued at $2.88 billion as of August 10. The company offers a wide range of services including leasing, capital markets sales, valuation, project management, and facilities management. In the year 2023, the company reported revenue of $9.5 billion across its core services of property, facilities project management, and other services. The company has also received numerous industry and business awards for its culture and commitment and is working with Microsoft to deploy an advanced suite of artificial intelligence solutions to improve its operational efficiency and increase competitive advantage.
On May 15, Cushman & Wakefield plc (NYSE:CWK) signed an exclusive affiliate agreement with CBS International to provide commercial property services in Austria. This agreement extends their successful partnership, as CBS International has been Cushman & Wakefield’s affiliate in Serbia and Montenegro since 2018 and in Croatia since 2019. CBS International, with around 400 employees, will now operate in Austria as Cushman & Wakefield CBS International. They have established an office in Vienna and are staffed with local market specialists and a team. The Austrian team includes specialists in Capital Markets, Agency, Valuation & Advisory, and Research & Insight, supported by CBS International’s broader business network to deliver comprehensive services.
Cushman & Wakefield plc’s (NYSE:CWK) new CEO is enhancing free cash flow, which gives the company greater flexibility to invest in growth opportunities, reduce debt, or return capital to shareholders. Additionally, Cushman & Wakefield plc (NYSE:CWK) is benefiting from long-term trends in the commercial real estate market, particularly the increasing outsourcing of property and facility management, which is expected to boost margins and further enhance free cash flow over time. The company’s asset-light and diversified business model also plays a significant role in its appeal, as it requires less capital investment, offers scalability, and reduces reliance on any single revenue stream, thereby providing greater stability. Furthermore, the market’s anticipation of interest rate cuts in 2024, as indicated by the Federal Reserve is seen as a positive development that could lower borrowing costs and make commercial real estate investments more attractive. Vulcan Value Partners stated the following regarding Cushman & Wakefield plc’s (NYSE:CWK) in its Q4 2023 investor letter:
“Cushman & Wakefield plc (NYSE:CWK) provides commercial real estate services including property management, transaction management, leasing brokerage, and other services in the sale and servicing of commercial real estate. The company and new CEO made progress improving free cash flow during the quarter. However, the bigger factor in the quarter affecting the company and its peers, was the general market view on interest rates and the Fed’s December announcement that three rate cuts are likely expected in 2024. Cushman has a good business model that is asset light and diversified. The company is benefiting from secular trends such as the outsourcing of property and facility management which should help improve margins and free cash flow going forward.”
Cushman & Wakefield plc (NYSE:CWK) is trading 14.19 times its earnings, which is a 60% discount compared to the sector median of 36. The company’s earnings are expected to grow by 14% this year. The stock was held by 22 hedge funds at the end of the first quarter with stakes worth $161.27 million. As of March 31, Southpoint Capital Advisors is the largest shareholder in the company with a stake worth $57.53 million. Analysts hold a consensus Buy rating on the stock and the high price target of $14 implies an upside of 8.6%.
