– Global commercial real estate services firm, one of three players with breadth and scale to win contracts with large, multinational clients.
– Trades at 7x PE after a recent 30% decline in share price.
– Investors fear that CWK is set for material decline due to a slowdown in the economy.
– However, the business is more resilient to a potential downturn than the market appreciates.
– 75% of earnings are from recurring and predictable services and fees, leaving only 25% of profits exposed to the economic cycle.
– And even for this more cyclical part, the slowdown is expected to be milder due to the dynamics of commercial real estate markets.
– In a longer-term – attractive industry with favorable competitive dynamics and long-term growth tailwinds.
$CWK valuation: Trades below 6x EBITDA and less than 7x earnings. At 10x 2025 EBITDA (equivalent to 14x PE) would be $50 stock.
Exp. gain: +200% to $50/share by 2025.
Full CWK write-up (free guest account required):