CBRE GROUP, INC. (CBRE): what the price requires

At today's price, CBRE GROUP, INC. (CBRE) is priced for today's economics sustained for ~5.5 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CBRE

Headline

FieldValue
TickerCBRE
CompanyCBRE GROUP, INC.
Current price$138.13/sh
CompositionFacilities management 51% / Property management 6% / Project management 19% / Advisory leasing 11% / Advisory sales 5% / Valuation 2% / Other portfolio services 1% / Commercial mortgage origination (Topic 606) 1% / Loan servicing (Topic 606) 0% / Investment management 1% / Development services (Topic 606) 1% / Commercial mortgage origination (Out of Scope of Topic 606) 1% / Loan servicing (Out of Scope of Topic 606) 1% / Development services (Out of Scope of Topic 606) 0%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed1.8%
Operating margin today4.2%
Margin compression implied-2.4pp
Must persist for5.5y
Multiple paid30x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.

How unusual the bet is: elevated

ReferenceValue
vs own history+0.53σ
cohort percentile (of 82 peers)48
sustained it ~5.5 years at this level28%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.27x5expensive
Earnings2.01x3expensive
Relative1.03x6expensive
Growth0.93x3justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$87.211.58xyesFCF base $1.0B, growth 15% (input: historical growth), terminal g 4.0%, WACC 8.2%, 6yr projection
DCF Exit MultipleGrowth$182.480.76xyesExit EV/EBITDA: 16.2x / 18.2x / 20.2x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$202.260.68xyesP/E 35x (static sector reference · 2026-04), scenarios: 28.7x / 35.0x / 41.3x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$47.762.89xyesBV/sh $28.69, ROE (TTM) 15.4%, ke 9.3%
Two-Stage Excess ReturnAsset$60.872.27xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$148.490.93xyesRev $42.2B, growth 15% (input: historical growth; tapered), Terminal P/S: 0.8x / 1.0x / 1.1x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$79.531.74xyesFFO/share $6.35, growth 13% (input: historical FFO/share growth, 10y median), PEG=2.50 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$21.786.34xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.57B × (1−25%) / WACC 8.2% → EPV (no growth)
Residual IncomeAsset$62.232.22xyesBV $28.69 + 5yr PV of (ROE (TTM) 15.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$64.022.16xyes√(22.5 × FFO/share $6.35 × BVPS $28.69) — Graham's conservative floor
EV/EBITDA RelativeRelative$154.270.90xyesEBITDA $2.72B × sector EV/EBITDA 20.0x
FCF YieldEarnings$3.6138.26xyesFCF $897.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.0113812.50xyesSBC-adj FCF $0.75B (FCF $0.90B − SBC $0.15B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$178.550.77xyesFFO/share $6.35 × (8.5 + 2×12.5%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$7.9017.48xyesBV $28.69 × (ROIC 2.2% / WACC 8.2%)
P/Sales SectorRelative$851.890.16xyesRevenue $42.17B × sector P/S 6.0x
PEG Fair ValueRelative$119.301.16xyesFFO/share $6.35 × (PEG 1.5 × growth 12.5% (input: historical FFO/share growth, 10y median)) → PE 18.8x
Earnings YieldEarnings$68.652.01xyesFFO/share $6.35 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative$90.041.53xyesFFO/share $6.35 × 14.2x P/FFO (route cohort median, n=85); FFO $1.89B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 297M
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$6.5b
Net debt / NOPAT (after-tax)5.26x
Net debt / operating income (pre-tax)3.97x
Share count CAGR (buyback)-3.1%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

The one number that drives CBRE is the transactional recovery. In the first quarter of 2026 the capital-markets and leasing businesses grew 22 percent, their fastest pace of the cycle, and that flowed straight to the bottom line as core EPS of $1.61 beat consensus by more than 40 percent and management raised full-year core EPS guidance to $7.60 to $7.80.

The business is more than a brokerage now. Contractual services, facilities and project management, building operations, and a fast-growing critical-infrastructure arm, give CBRE a recurring base that grows through cycles, with infrastructure services up 71 percent on data centers and an acquisition.

At about $132 the price pays roughly 28 times company-wide operating income, which the model flags as elevated. The growth-DCF and relative-multiple reads support the price; the asset and earnings-power reads do not.

Bull Case

Anchor on the single most decisive metric, the one that flips the verdict: the growth rate of CBRE's transactional businesses. Capital markets and leasing are the high-incremental-margin engine of this company, and they are highly operating-leveraged, so when deal volume recovers, profit recovers far faster than revenue. In the first quarter of 2026 those transactional businesses grew 22 percent, the highest rate of the current cycle, US office leasing revenue rose 15 percent, and the result dropped through to a core EPS of $1.61 against a $1.13 consensus, a beat of more than 40 percent. Net income roughly doubled year over year and management raised full-year 2026 core EPS guidance to $7.60 to $7.80, implying about 21 percent growth at the midpoint. After years of a frozen real-estate transaction market, the thaw is the catalyst, and the early innings of it are already in the numbers.

The second pillar is that CBRE is no longer a pure cyclical brokerage. The three services segments, advisory, building operations and experience, and project management, grew revenue 20 percent and operating profit nearly 30 percent, and the Global Workplace Solutions resilient-business strategy grew 18 percent. These are contractual, outsourcing-based revenue streams that compound across cycles, and the company is explicit that its revenues depend on companies' reliance on outsourcing for their commercial real estate needs (FY2025 10-K, accession 0001138118-26-000005). That contractual base is the ballast that makes the transactional upside investable rather than a pure bet on the cycle.

The third pillar is the secular mix shift toward data centers and logistics. Critical infrastructure services revenue grew 71 percent year over year, driven by Data Center Solutions and the Pearce Services acquisition, with full-year segment growth expected above 60 percent, and the company highlights its leadership across asset classes including the secular growth sectors of logistics and data centers as a differentiator in delivering integrated global solutions (same 10-K). The growth-DCF, relative-multiple, and EV/EBITDA reads all land at or above the current price, several well above. The bull case is that a transactional recovery is layering on top of a growing contractual base and a data-center tailwind, and that combination is what the optimistic models are pricing.

Bear Case

Start with the qualitative disconnect before the ratios: CBRE is being valued like a durable compounder while half its profit engine is one of the most cyclical businesses in finance. Commercial real estate transactions swing violently with interest rates and credit availability, and the 22 percent transactional growth that is powering the current numbers is a recovery off a depressed base, not a permanent run-rate. The market is paying for the upcycle as if it will persist, and a richly priced cyclical at the top of its own recovery is a setup that has punished investors before.

The numbers make the disconnect concrete. At about $132 (June 28, 2026) the price is near 28 times company-wide operating income, and the model labels the priced-in assumption elevated, above what fundamentals comfortably support, requiring operating growth held at a high rate for about five years when only roughly 29 percent of comparable companies have sustained that pace that long. The conservative families say the same thing more bluntly: the asset-based and earnings-power models land far below the price, in the $20s to $60s, because CBRE runs thin reported operating margins, with a large share of its revenue being pass-through facilities and project costs, and carries net debt above $6 billion. Strip out the cyclical recovery and the standing economics do not support the multiple.

The structural risk is that the contractual base, the supposed ballast, is not as recession-proof as the framing suggests. The company itself warns that client actions to restrain project spending and reduce outsourcing would hurt revenue and operating performance (FY2025 10-K, accession 0001138118-26-000005), and in a genuine downturn corporate clients cut discretionary facilities and project spend even on outsourced contracts. If the rate environment stays restrictive and the transaction recovery stalls, the high-margin capital-markets growth that justified the re-rating reverses, project work softens, and the price reprices toward the conservative cluster well below today's level. A leveraged, cyclical services business priced for durable compounding has a long way to fall if the cycle turns before the contractual mix is large enough to carry it.

Valuation

CBRE is a cyclical services business priced for sustained compounding, and the inversion makes the tension explicit. At about $132 the market pays roughly 28 times company-wide operating income, which backs into operating growth held near a high rate for about five years. The near-term pace is within what the company has recently delivered as the transaction market recovers, but the model flags the overall assumption as elevated, and only about 29 percent of comparable companies have sustained such growth that long, so the price is a bet on the recovery being durable rather than a snap-back.

The model families divide along exactly that fault line. The growth-DCF, relative-multiple, and EV/EBITDA reads land at or above the price, in the $140s to above $200, reflecting the earnings power of a recovering transaction cycle plus a growing contractual base. The asset-based and earnings-power families land far below, in the $20s to $60s, because CBRE's reported operating margin is thin by the nature of its pass-through revenue and it carries meaningful net debt. The very low free-cash-flow-based reads reflect a working-capital-heavy, acquisition-active quarter and should be read as cycle-timing artifacts rather than steady-state value.

The practical conclusion is a stock whose fair value depends entirely on which frame you trust, and that in turn depends on the durability of the transaction recovery and the growth of the contractual and data-center businesses. The forward range from the reliable models brackets the price, with a base in the high $110s and a high in the mid $140s.

Catalysts

The decisive catalyst is the trajectory of the transaction market. First-quarter 2026 showed the recovery accelerating: capital markets and leasing grew 22 percent, the best of the cycle, US office leasing rose 15 percent, core EPS of $1.61 beat the roughly $1.13 consensus by more than 40 percent, and management raised full-year core EPS guidance to $7.60 to $7.80. Watch capital-markets and leasing growth, interest-rate direction, and credit availability, since the high-margin transactional businesses are where operating leverage lives and where the thesis is won or lost.

The secular catalysts are the contractual and infrastructure segments. Critical infrastructure services grew 71 percent on Data Center Solutions and the Pearce Services acquisition, with full-year growth guided above 60 percent, and the Global Workplace Solutions resilient-business strategy grew 18 percent, so data-center demand, outsourcing wins, and the integration of acquisitions are the through-cycle growth signals. The risk catalysts run the other way: any client move to restrain project spending or pull back on outsourcing in a downturn, or a stall in the rate-sensitive transaction recovery, would undercut both the cyclical upside and the contractual ballast. Capital allocation, including buybacks against a roughly $6.5 billion net-debt position, is worth tracking for balance between returns and deleveraging.

Sources: CBRE Q1 2026 results, revenue $10.5 billion, net income $342 million, core EPS $1.61 versus about $1.13 consensus, transactional growth 22 percent, services revenue up 20 percent, GWS resilient up 18 percent, critical infrastructure up 71 percent, raised 2026 core EPS guidance $7.60 to $7.80 (SEC Form 10-Q and earnings release, April 2026; CBRE investor relations, GuruFocus, StockTitan coverage); CBRE FY2025 10-K on outsourcing-dependent revenue, project-spending risk, and asset-class leadership in data centers and logistics (accession 0001138118-26-000005, filed Feb 12, 2026).

Peer Cohorts (Per Segment, With Filing Citations)

Advisory Services (reported)

Building Operations & Experience (reported)

Project Management (reported)

Real Estate Investments (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CBRE report on boothcheck