CBRE Group Inc's stock surged 5.08% during intraday trading on Friday, demonstrating significant investor confidence despite a recent analyst price target reduction.
The commercial real estate services firm's rally comes after Keefe, Bruyette & Woods (KBW) cut its price target on CBRE to $170 from $192, while maintaining an Outperform rating. This adjustment contrasts with the stock's positive movement, suggesting other factors are driving investor enthusiasm.
Analysis reveals CBRE has delivered strong earnings growth of 28.2% over the past 12 months, with the stock currently trading at $136.28 - well below both the discounted cash flow fair value estimate of approximately $181.08 and the average analyst price target of $185.33 according to FactSet data. This valuation gap, combined with sustained profitability growth, appears to be outweighing concerns from the KBW target reduction in investors' assessment of the company's prospects.