Intrinsic value of CBRE Group, Inc. - CBRE

Previous Close

$50.89

  Intrinsic Value

$82.05

stock screener

  Rating & Target

str. buy

+61%

Previous close

$50.89

 
Intrinsic value

$82.05

 
Up/down potential

+61%

 
Rating

str. buy

We calculate the intrinsic value of CBRE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 17.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.40
  13.46
  12.61
  11.85
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.65
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.67
  5.61
  5.55
  5.49
  5.44
Revenue, $m
  24,413
  27,699
  31,193
  34,890
  38,786
  42,879
  47,164
  51,643
  56,315
  61,182
  66,246
  71,512
  76,987
  82,675
  88,587
  94,731
  101,118
  107,759
  114,667
  121,856
  129,342
  137,139
  145,266
  153,739
  162,579
  171,805
  181,438
  191,502
  202,019
  213,015
Variable operating expenses, $m
  22,948
  25,968
  29,180
  32,578
  36,159
  39,920
  43,860
  47,976
  52,270
  56,743
  60,889
  65,729
  70,761
  75,989
  81,423
  87,070
  92,940
  99,044
  105,394
  112,002
  118,882
  126,049
  133,518
  141,306
  149,431
  157,911
  166,765
  176,015
  185,682
  195,788
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  22,948
  25,968
  29,180
  32,578
  36,159
  39,920
  43,860
  47,976
  52,270
  56,743
  60,889
  65,729
  70,761
  75,989
  81,423
  87,070
  92,940
  99,044
  105,394
  112,002
  118,882
  126,049
  133,518
  141,306
  149,431
  157,911
  166,765
  176,015
  185,682
  195,788
Operating income, $m
  1,465
  1,731
  2,013
  2,312
  2,627
  2,958
  3,305
  3,667
  4,045
  4,438
  5,357
  5,783
  6,226
  6,686
  7,164
  7,661
  8,177
  8,715
  9,273
  9,855
  10,460
  11,091
  11,748
  12,433
  13,148
  13,894
  14,673
  15,487
  16,337
  17,227
EBITDA, $m
  2,264
  2,569
  2,893
  3,236
  3,597
  3,977
  4,374
  4,789
  5,223
  5,674
  6,144
  6,632
  7,140
  7,667
  8,216
  8,785
  9,378
  9,994
  10,634
  11,301
  11,995
  12,718
  13,472
  14,258
  15,078
  15,933
  16,827
  17,760
  18,735
  19,755
Interest expense (income), $m
  0
  167
  234
  304
  380
  459
  543
  632
  724
  820
  921
  1,026
  1,135
  1,249
  1,367
  1,489
  1,617
  1,749
  1,887
  2,030
  2,179
  2,334
  2,495
  2,663
  2,838
  3,021
  3,211
  3,410
  3,618
  3,835
  4,061
Earnings before tax, $m
  1,298
  1,497
  1,709
  1,933
  2,168
  2,415
  2,673
  2,943
  3,224
  3,517
  4,331
  4,648
  4,977
  5,319
  5,675
  6,044
  6,428
  6,828
  7,243
  7,676
  8,126
  8,596
  9,085
  9,595
  10,127
  10,683
  11,263
  11,869
  12,503
  13,165
Tax expense, $m
  350
  404
  461
  522
  585
  652
  722
  795
  871
  950
  1,169
  1,255
  1,344
  1,436
  1,532
  1,632
  1,736
  1,844
  1,956
  2,072
  2,194
  2,321
  2,453
  2,591
  2,734
  2,884
  3,041
  3,205
  3,376
  3,555
Net income, $m
  947
  1,093
  1,247
  1,411
  1,583
  1,763
  1,952
  2,148
  2,354
  2,568
  3,162
  3,393
  3,633
  3,883
  4,143
  4,412
  4,693
  4,984
  5,288
  5,603
  5,932
  6,275
  6,632
  7,004
  7,393
  7,798
  8,222
  8,664
  9,127
  9,611

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,393
  17,465
  19,668
  21,999
  24,455
  27,036
  29,738
  32,562
  35,508
  38,576
  41,769
  45,090
  48,541
  52,128
  55,856
  59,729
  63,756
  67,944
  72,299
  76,832
  81,552
  86,469
  91,592
  96,935
  102,509
  108,326
  114,400
  120,745
  127,377
  134,309
Adjusted assets (=assets-cash), $m
  15,393
  17,465
  19,668
  21,999
  24,455
  27,036
  29,738
  32,562
  35,508
  38,576
  41,769
  45,090
  48,541
  52,128
  55,856
  59,729
  63,756
  67,944
  72,299
  76,832
  81,552
  86,469
  91,592
  96,935
  102,509
  108,326
  114,400
  120,745
  127,377
  134,309
Revenue / Adjusted assets
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
  1.586
Average production assets, $m
  3,564
  4,044
  4,554
  5,094
  5,663
  6,260
  6,886
  7,540
  8,222
  8,933
  9,672
  10,441
  11,240
  12,071
  12,934
  13,831
  14,763
  15,733
  16,741
  17,791
  18,884
  20,022
  21,209
  22,446
  23,736
  25,084
  26,490
  27,959
  29,495
  31,100
Working capital, $m
  1,611
  1,828
  2,059
  2,303
  2,560
  2,830
  3,113
  3,408
  3,717
  4,038
  4,372
  4,720
  5,081
  5,457
  5,847
  6,252
  6,674
  7,112
  7,568
  8,043
  8,537
  9,051
  9,588
  10,147
  10,730
  11,339
  11,975
  12,639
  13,333
  14,059
Total debt, $m
  4,325
  5,636
  7,031
  8,506
  10,061
  11,695
  13,405
  15,193
  17,057
  19,000
  21,021
  23,123
  25,308
  27,578
  29,938
  32,390
  34,939
  37,589
  40,347
  43,216
  46,204
  49,316
  52,559
  55,941
  59,469
  63,151
  66,996
  71,013
  75,211
  79,599
Total liabilities, $m
  9,744
  11,055
  12,450
  13,925
  15,480
  17,114
  18,824
  20,612
  22,476
  24,419
  26,440
  28,542
  30,727
  32,997
  35,357
  37,809
  40,358
  43,008
  45,766
  48,635
  51,623
  54,735
  57,978
  61,360
  64,888
  68,570
  72,415
  76,432
  80,629
  85,018
Total equity, $m
  5,649
  6,410
  7,218
  8,074
  8,975
  9,922
  10,914
  11,950
  13,031
  14,157
  15,329
  16,548
  17,815
  19,131
  20,499
  21,921
  23,399
  24,935
  26,534
  28,198
  29,930
  31,734
  33,614
  35,575
  37,621
  39,756
  41,985
  44,314
  46,747
  49,292
Total liabilities and equity, $m
  15,393
  17,465
  19,668
  21,999
  24,455
  27,036
  29,738
  32,562
  35,507
  38,576
  41,769
  45,090
  48,542
  52,128
  55,856
  59,730
  63,757
  67,943
  72,300
  76,833
  81,553
  86,469
  91,592
  96,935
  102,509
  108,326
  114,400
  120,746
  127,376
  134,310
Debt-to-equity ratio
  0.770
  0.880
  0.970
  1.050
  1.120
  1.180
  1.230
  1.270
  1.310
  1.340
  1.370
  1.400
  1.420
  1.440
  1.460
  1.480
  1.490
  1.510
  1.520
  1.530
  1.540
  1.550
  1.560
  1.570
  1.580
  1.590
  1.600
  1.600
  1.610
  1.610
Adjusted equity ratio
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  947
  1,093
  1,247
  1,411
  1,583
  1,763
  1,952
  2,148
  2,354
  2,568
  3,162
  3,393
  3,633
  3,883
  4,143
  4,412
  4,693
  4,984
  5,288
  5,603
  5,932
  6,275
  6,632
  7,004
  7,393
  7,798
  8,222
  8,664
  9,127
  9,611
Depreciation, amort., depletion, $m
  799
  838
  880
  924
  970
  1,018
  1,069
  1,122
  1,178
  1,236
  786
  849
  914
  981
  1,052
  1,124
  1,200
  1,279
  1,361
  1,446
  1,535
  1,628
  1,724
  1,825
  1,930
  2,039
  2,154
  2,273
  2,398
  2,528
Funds from operations, $m
  1,746
  1,931
  2,127
  2,334
  2,552
  2,781
  3,021
  3,271
  3,532
  3,803
  3,948
  4,242
  4,547
  4,865
  5,194
  5,537
  5,893
  6,263
  6,649
  7,050
  7,467
  7,903
  8,356
  8,829
  9,323
  9,838
  10,376
  10,938
  11,525
  12,139
Change in working capital, $m
  203
  217
  231
  244
  257
  270
  283
  296
  308
  321
  334
  348
  361
  375
  390
  405
  422
  438
  456
  474
  494
  515
  536
  559
  583
  609
  636
  664
  694
  726
Cash from operations, $m
  1,544
  1,714
  1,897
  2,090
  2,295
  2,511
  2,738
  2,975
  3,223
  3,482
  3,614
  3,894
  4,186
  4,489
  4,804
  5,131
  5,471
  5,825
  6,193
  6,575
  6,973
  7,388
  7,820
  8,270
  8,739
  9,229
  9,740
  10,273
  10,831
  11,413
Maintenance CAPEX, $m
  -253
  -290
  -329
  -370
  -414
  -460
  -509
  -560
  -613
  -668
  -726
  -786
  -849
  -914
  -981
  -1,052
  -1,124
  -1,200
  -1,279
  -1,361
  -1,446
  -1,535
  -1,628
  -1,724
  -1,825
  -1,930
  -2,039
  -2,154
  -2,273
  -2,398
New CAPEX, $m
  -458
  -480
  -510
  -540
  -569
  -597
  -626
  -654
  -682
  -711
  -739
  -769
  -799
  -831
  -863
  -897
  -932
  -970
  -1,009
  -1,050
  -1,093
  -1,138
  -1,186
  -1,237
  -1,291
  -1,347
  -1,407
  -1,469
  -1,536
  -1,605
Cash from investing activities, $m
  -711
  -770
  -839
  -910
  -983
  -1,057
  -1,135
  -1,214
  -1,295
  -1,379
  -1,465
  -1,555
  -1,648
  -1,745
  -1,844
  -1,949
  -2,056
  -2,170
  -2,288
  -2,411
  -2,539
  -2,673
  -2,814
  -2,961
  -3,116
  -3,277
  -3,446
  -3,623
  -3,809
  -4,003
Free cash flow, $m
  833
  945
  1,058
  1,180
  1,312
  1,453
  1,603
  1,762
  1,928
  2,103
  2,148
  2,339
  2,538
  2,745
  2,960
  3,183
  3,415
  3,655
  3,905
  4,165
  4,434
  4,714
  5,005
  5,308
  5,624
  5,952
  6,294
  6,650
  7,022
  7,410
Issuance/(repayment) of debt, $m
  1,226
  1,311
  1,394
  1,476
  1,555
  1,633
  1,711
  1,788
  1,865
  1,942
  2,021
  2,102
  2,185
  2,271
  2,359
  2,452
  2,549
  2,651
  2,757
  2,869
  2,988
  3,112
  3,243
  3,382
  3,528
  3,682
  3,845
  4,017
  4,198
  4,388
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,226
  1,311
  1,394
  1,476
  1,555
  1,633
  1,711
  1,788
  1,865
  1,942
  2,021
  2,102
  2,185
  2,271
  2,359
  2,452
  2,549
  2,651
  2,757
  2,869
  2,988
  3,112
  3,243
  3,382
  3,528
  3,682
  3,845
  4,017
  4,198
  4,388
Total cash flow (excl. dividends), $m
  2,059
  2,256
  2,452
  2,656
  2,867
  3,087
  3,314
  3,549
  3,793
  4,045
  4,170
  4,441
  4,723
  5,015
  5,319
  5,635
  5,964
  6,306
  6,662
  7,034
  7,422
  7,826
  8,249
  8,690
  9,152
  9,634
  10,139
  10,667
  11,220
  11,799
Retained Cash Flow (-), $m
  -710
  -760
  -808
  -856
  -902
  -947
  -992
  -1,036
  -1,081
  -1,126
  -1,172
  -1,219
  -1,267
  -1,316
  -1,368
  -1,422
  -1,478
  -1,537
  -1,599
  -1,664
  -1,732
  -1,804
  -1,880
  -1,961
  -2,046
  -2,135
  -2,229
  -2,329
  -2,434
  -2,544
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1,349
  1,496
  1,644
  1,800
  1,966
  2,140
  2,322
  2,513
  2,712
  2,919
  2,998
  3,222
  3,456
  3,699
  3,951
  4,213
  4,486
  4,769
  5,064
  5,370
  5,690
  6,022
  6,368
  6,730
  7,106
  7,499
  7,910
  8,338
  8,786
  9,254
Discount rate, %
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
  1,290
  1,364
  1,421
  1,469
  1,506
  1,530
  1,541
  1,538
  1,519
  1,487
  1,377
  1,324
  1,258
  1,183
  1,098
  1,007
  912
  815
  718
  623
  533
  448
  370
  301
  240
  188
  144
  108
  79
  57
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

FINANCIAL RATIOS  of  CBRE Group, Inc. (CBRE)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CBRE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBRE stock intrinsic value calculation we used $21340 million for the last fiscal year's total revenue generated by CBRE Group, Inc.. The default revenue input number comes from 0001 income statement of CBRE Group, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CBRE stock valuation model: a) initial revenue growth rate of 14.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for CBRE is calculated based on our internal credit rating of CBRE Group, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CBRE Group, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CBRE stock the variable cost ratio is equal to 94.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CBRE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for CBRE Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for CBRE Group, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CBRE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CBRE are equal to 14.6%.

Life of production assets of 12.3 years is the average useful life of capital assets used in CBRE Group, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CBRE is equal to 6.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4938.797 million for CBRE Group, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 335.900 million for CBRE Group, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CBRE Group, Inc. at the current share price and the inputted number of shares is $17.1 billion.

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