Multiple Upgrades Colliers International Group Inc. continues to make strong strides in “bullet proofing its business and enhancing profitability,” said Raymond James analyst Frederic Bastien.
On Tuesday, the Toronto-based diversified professional services and investment management company reported adjusted EBITDA for its third quarter of US$124-million, exceeding both Mr. Bastien’s forecast (by 16 per cent) and the consensus expectation (by 21 per cent).
“While all four reporting segments contributed to the positive variance to our forecast, Investment Management (IM) stole the show on the back of a healthy increase in Assets Under Management,” the analyst said. “Encouragingly, those AUM are poised to grow further as the previously announced acquisition of Antirion closes at the beginning of next year. On a year-over-year basis, the 34-per-cent increase in adjusted EBITDA outpaced CIGI’s bottom-line growth (17 per cent) because of this spring’s share issuance to settle Jay Hennick’s MSA and a higher-than- anticipated NCI share of earnings rate. That said, adjusted EPS of $1.27 still landed well ahead of our estimate of $1.16 and the consensus of $1.05.”
After Colliers raised its full-year guidance, Mr. Bastien said his long-term outlook is “equally constructive, with the acquisitions of engineering consultancy Bergmann and asset manager Antirion giving CIGI a head start on its Enterprise 2025 growth plan (which calls for earnings to double over five years).”
Keeping an “outperform” recommendation for its shares, Mr. Bastien raised his target to US$160 from US$155. The average target is US$161.50.
“Despite significant industry consolidation, we argue the runway for further market share gains, expansion into complementary disciplines and long-term revenue growth remains long and wide,” he said.
Other analysts making target changes include:
* CIBC World Markets’ Scott Fromson to US$180 from US$160, keeping an “outperformer” rating.
* Scotia Capital’s George Doumet to US$170 from US$165 with a “sector outperform” rating.
* BMO’s Stephen MacLeod to US$172 from US$153 with an “outperform” rating.