Bullboard - Stock Discussion Forum Colliers International Group Inc T.CIGI

Alternate Symbol(s): CIGI

Colliers International Group Inc. is a diversified professional services company. It provides commercial real estate services, engineering consultancy and investment management with operations in 70 countries. Its segment includes Real Estate Services, Engineering and Investment Management. Its primary service lines are outsourcing, engineering, investment management, leasing and capital... see more

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TSX:CIGI - Post Discussion

Colliers International Group Inc > TD 2

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Post by retiredcf on Nov 03, 2021 8:13am

TD 2

Colliers International Group Inc.

(CIGI-N, CIGI-T) US$143.45 | C$175.13

Q3/21 Impressive; Globalization of CRE a Feature of 2025 Plan Event

Colliers reported Q3/21 adjusted EBITDA of $123.6mm, 21% above consensus of $102.5mm and 12% above TD's $110.7mm forecast, reflecting stronger-than- expected revenue, partially offset by weaker-than-expected margins (12.1% vs. TD's 13.1%).

Impact: POSITIVE

Q3/21 was another blow-out quarter, with all business lines/geographies beating revenue expectations. Revenue increased 48% y/y (45% organic, 1% M&A, and 2% F/X) to $1,023mm, 21% above TD's $845mm estimate (consensus: $810.5mm). Brokerage continued to be a highlight, with capital markets 34% above (organic, excluding F/X) and leasing 8% above pre-pandemic levels (industry-leader CBRE reported leasing ~7% above pre-pandemic level). Office leasing continued to recover and is within 5% of pre-pandemic levels versus down 29% in Q2/21. IM was also very strong, with EBITDA increasing 82% y/y to $27.8mm (TD: $19.5mm), reflecting management fee growth from increased AUM. YTD, IM has raised a record $4.9bln (AUM: $46.1bln, +27% y/y).
Guidance update: Colliers increased its full-year 2021 guidance for the third time, and now expects 40-45% y/y EBITDA growth (up from 25-35% previously).
Enterprise 2025 strategy: Management provided an optimistic outlook for its growth strategy, highlighting the global opportunities to grow with its existing clients and cross-sell its continuously expanding service offering across borders. Management also noted that the opportunities to help institutional clients allocate capital globally has never been greater. We believe that CIGI is uniquely positioned to capitalize on these themes and it will drive continued market-share wins, given that there are few truly global full-service CRE providers. With respect to sales/lease brokerage, management noted that it expects a low- to mid-single- digit growth rate for this service line during the five-year period, granted we anticipate that it could be somewhat lumpy y/y, particularly following this record year. Interestingly, management noted that in the near term, it will continue to double-down on its existing businesses, but that the new strategy does contemplate acquiring another platform in a new vertical over the long term, possibly in year four or five.

TD Investment Conclusion

We are maintaining our BUY recommendation and US$170.00 target price. We are attracted to Colliers' large and highly fragmented markets, demonstrated ability to add value through M&A, and improving mix of recurring revenues.