CUSHMAN & WAKEFIELD LTD. (CWK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $13.66, CUSHMAN & WAKEFIELD LTD. (CWK) is priced for +2.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/CWK

Headline

What The Price Assumes (Inversion)

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

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by earnings-power and relative-multiple and growth-DCF value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

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.

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

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

Solvency

Bullet Takeaways

• Very little of what Cushman & Wakefield collects stays with it: about 10.54 billion dollars of revenue leaves roughly 3.4 cents of operating profit per dollar, so modest swings in leasing and capital-markets activity move profit far more than they move the top line.

• The capital structure is the constraint, with net borrowings at about 6.92 times operating profit and operating profit covering interest only about 1.6 times, against a stack that includes what the FY2025 annual report describes as $650.0 million in aggregate principal amount of 6.750% senior secured notes due in 2028.

• Second-quarter results are due August 5, 2026, and the run rate going in is strong: the March 2026 quarter delivered Revenue of $2.5 billion for the first quarter of 2026 increased 11% from the first quarter of 2025, with services revenue up 9%.

Bull Case

Watch where the money went over the past two years and the strategy becomes legible without anyone having to announce it. Management did not buy growth. It rebuilt the liability side. The 2018 credit agreement was repriced in 2024 and again on October 1, 2025, pushing the bulk of the term debt out to 2030 at lower applicable rates, and the annual report describes a liquidity position consisting of availability on our undrawn Revolver of $1.0 billion and cash and cash equivalents of $0.8 billion at the end of 2025. Meanwhile the share count has grown 0.4% a year over the four years to March 2026, which for a company that spent that stretch working through a property downturn is close to a statement of intent: no rescue equity, no dilution, just a slower and cheaper stack of debt.

The operating recovery underneath that has turned. For 2025 the company reported Adjusted EBITDA of $656.2 million increased $74.3 million or 13% compared to the year ended December 31, 2024, and the March 2026 quarter carried the momentum forward with revenue of 2.5 billion dollars, up 11% year over year and services revenue up 9%. Americas adjusted profitability rose $18.7 million or 24% compared to the first quarter of 2025, primarily attributable to growth in our Americas Leasing and Capital markets service lines. Europe moved in the same direction: capital markets revenue there grew 13% in local currency during 2025, and project management picked up approximately $37.0 million driven by new wins, with particular strength in France and Italy.

This is where the thin margin becomes an argument for rather than against. On a business converting roughly 3.4% of revenue into operating profit, an incremental transaction dollar arrives with almost no incremental cost attached to it, because the brokers, the offices and the systems are already paid for. Recovery in transaction-driven revenue therefore lands on the bottom line at a multiple of its effect on the top line. That mechanic runs in reverse too, which is the honest concession, and it is why the cost work of the past two years matters more than the revenue line does.

The cohort comparison frames the size of the prize. CBRE earns a 4.7% operating margin, JLL 4.4%, and NMRK, a much smaller specialist, 8.0%. Cushman runs beneath all three. Closing even part of that distance on a revenue base above ten billion dollars is worth more than any plausible acquisition, and it requires nothing the business has not already done in individual quarters. The bull case does not need this company to become the best operator in commercial real estate services. It needs it to become an ordinary one.

Bear Case

The balance sheet was assembled for a different property cycle and the company is still working it off. As of December 31, 2025, the annual report puts amounts outstanding under its Term Loans, 2028 Notes and 2031 Notes were $1.7 billion, $0.6 billion and $0.4 billion, respectively. Set that against 334.3 million dollars of trailing operating profit and the picture is a business carrying net borrowings of roughly 6.92 times operating profit, with operating profit covering the interest bill about 1.6 times. Neither number is a crisis. Both leave the equity with very little room between a decent year and an uncomfortable one.

The specific fragility is that revenue is transactional and margin is thin. Roughly 3.4 cents of every revenue dollar reaches operating profit. A downturn that takes a tenth out of leasing and capital-markets volume does not take a tenth out of profit; it takes a far larger share, because the cost base is people and offices that cannot be released on the same timetable that deal flow disappears. The annual report is direct about how the client side concentrates that exposure: The concentration of business with specific corporate clients can increase business risk, and our business can be adversely affected by a loss of certain of these clients.

Working capital carries its own dependency. The company sells receivables through a securitization facility at meaningful scale, with the filing recording that cash collections from customers on receivables sold were $2.9 billion in the period, all of it reinvested into new receivable purchases. That is a financing arrangement doing the work of a balance sheet, and it has to be renewed by counterparties whose appetite for property-services receivables is itself cyclical. It is cheap and reliable right up until it is neither.

Then there is the return the business actually earns on the capital it employs. Return on equity runs near 3.8% against a cost of equity closer to 9.3%. A business earning less on its book than that hurdle is, arithmetically, eroding book value every year it does so, and that is precisely why the book-value approaches land so far beneath the current price while the earnings-based and multiple-based ones do not. The optimistic methods are pricing the recovery. The conservative ones are pricing what the equity has demonstrated it can earn.

The price already assumes the recovery continues, too: today's level implies operating profit compounding at roughly 11.2% a year for about five years. That pace sits inside what the company has recently delivered, so the demand is not the rate but the persistence, and among companies that have grown at that pace historically only about 52% held it for five years. The floor beneath a disappointment is not nothing. Roughly 599 million dollars of equity interests sit outside the operating business, close to a fifth of the market value, and they hold value independently of how many buildings change hands next year. That is the boundary on the downside, not a reason to own it.

Valuation

Something unusual shows up when the valuation approaches are lined up here: most of them already reach today's price. Earnings-power methods, peer-multiple methods and forward-growth methods all land at or above 12.74. Only the book-value approaches sit below, and they sit far below. That is the signature of a value-shaped situation rather than a growth premium, and it puts the analytical question in a different place than usual. The issue is not whether the price has run past the evidence. It is whether the book-value methods are telling the truth about what the equity earns.

What the price does assume is continuation. Inverted, today's level pays for company-wide operating profit to compound at roughly 11.2% a year for about five years, computed at a 9.7% cost of capital. That assumption is sensitive to the rate used: a single percentage point of cost of capital moves the implied growth requirement by something like six points, which is a reminder to hold the figure loosely. Against the company's own recent record the pace is unremarkable. The duration is the demand.

The book-value lens objects for a concrete reason. Book value is about 8.39 per share against a price of 12.74, and the return earned on that book runs near 3.8% while the cost of that equity sits closer to 9.3%. Methods built on excess returns therefore assign a value well under the price, since by their construction a business earning below its cost of equity is worth less than its stated book. Methods built on earnings and on comparable multiples reach a different answer because they capitalize the cash the operation actually throws off. Both are looking at the same company. They disagree about whether the accounting book or the cash flow is the better description of it.

The cohort places the margin problem precisely. Cushman converts about 3.4% of revenue into operating profit. CBRE manages 4.7% on a revenue base of roughly 42.2 billion. JLL manages 4.4%. NMRK, at a fraction of the size, manages 8.0%. On a revenue line above ten billion dollars, the entire market value of the equity is under a third of a single year's revenue, which is what the market pays for a razor-thin conversion rate rather than for a shortage of business.

Solvency sets the boundary on all of it. Gross borrowings run about 2.91 billion, liquid assets about 600.6 million, and net borrowings sit at roughly 6.92 times operating profit with coverage of about 1.6 times. The company is not consuming cash, the share count has been effectively flat for four years, and the nearest large maturity has been repriced and pushed out. The structure holds comfortably in an ordinary year. It is built with no allowance for two bad ones in a row.

Catalysts

Second-quarter results arrive on August 5, 2026. The number that matters most is not revenue but the conversion rate: with the March quarter having already delivered 11% revenue growth, the question for the June quarter is how much of that growth reached profit.

The firm's own market research, published in the weeks before the print, points the same direction. On July 17, 2026 it reported that the U.S. office recovery had broadened, with vacancy declining across more than half of U.S. markets on second-quarter data, and on July 23, 2026 it put national industrial vacancy back below 7% on modest new supply and firming demand. Occupancy and vacancy are the leading indicators for a business paid on leasing and sales activity, and both moved the right way in the quarter about to be reported.

Two other items shape the next few quarters. The firm announced on July 21, 2026 that three senior valuation and advisory leaders had rejoined, a rebuild of the practice that produces recurring appraisal fees rather than transaction-dependent ones. And the October 1, 2025 repricing of the 2030 term loan tranche continues to lower interest cost through 2026, which flows straight to the bottom line without requiring a single additional deal to close.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• CBRE (CBRE GROUP, INC.)
• FY2025 10-K: …and global competitors across all of our business lines and the geographies that we serve, and further industry consolidation, fragmentation or innovation could lead to significant future competition. We compete across a variety of business disciplines within the commercial real estate services and investment…
• FY2025 10-K: …and amortization expense decreased 6.3%, reflecting lower amortization expense due to intangible assets being fully amortized in 2024. 33 Table of Contents Real Estate Investments The following table summarizes our results of operations for our REI operating segment for the years ended December 31, 2025 and 2024…
• JLL (Jones Lang LaSalle Incorporated)
• FY2025 10-K: …may indicate a rate of growth or decline that might not have been consistent with the real underlying rate of growth or decline in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our…
• FY2025 10-K: , monitoring and compliance reporting. As sustainability becomes increasingly central to real estate decision-making, our capabilities allow us to help clients navigate this evolving landscape, create meaningful career opportunities for our employees, and generate value for our shareholders. COMPETITION We operate…
• CIGI (Colliers International Group Inc.)
• FY2025 40-F: …administration expenses of the Company excluding stock-based compensation and restructuring, optimization and integration costs. It also includes an adjustment to remove the impact of gains attributable to MSRs. The CODM is not provided with total asset information by segment and does not consider total assets in…
• FY2025 40-F: Operating activities Net earnings $ 224,553 $ 236,936 Items not affecting cash: Depreciation and amortization 256,015 221,602 Gains attributable to mortgage servicing rights ( 31,237 ) ( 15,363 ) Gains attributable to the fair value of mortgage premiums and origination fees ( 24,207 ) ( 13,000 ) Deferred tax ( 16,044…
• NMRK (NEWMARK GROUP, INC.)
• FY2025 10-K: …Real Estate Services Industry We operate in a highly competitive industry with numerous competitors, some of which may have greater financial and operational resources than we do. We compete to provide a variety of services within the commercial real estate industry. Each of these business disciplines is highly…
• FY2025 10-K: …than we are at growing through merger and acquisition activity. See the heading "Competition" under Part I, Item 1, Business for more information. In general, there can be no assurance that we will be able to continue to compete effectively with respect to any of our commercial real estate business lines or on an…
• FSV (FirstService Corporation)
• FY2025 40-F: …The loan amounts are measured based on the formula price of the underlying non-controlling interests, and interest rates are determined based on market rates plus a spread. The loans generally have terms of 5 to 10 years, but are open for repayment without penalty at any time. Page 26 of 28 19. Segmented information…
• FY2025 40-F: …items. 2024 acquisitions: The Company completed eight acquisitions in 2024, two in the FirstService Residential segment and six in the FirstService Brands segment. In the FirstService Residential segment, the Company acquired two property management firms operating in Tampa, Florida and San Francisco, California,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

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.