CBRE Announces Expanded $5 Billion Stock Repurchase Authorization

Rhea-AI Summary

CBRE Group (NYSE: CBRE) has announced its Board of Directors' approval of an additional $5 billion stock repurchase authorization, supplementing the existing $4 billion program which had $1.4 billion remaining as of September 30, 2024. The company's CFO Emma Giamartino highlighted CBRE's strong financial position, with over $4 billion in liquidity, low leverage, and projected free cash flow exceeding $1 billion this year. Since 2021, CBRE has repurchased 36 million shares for approximately $3 billion at an average price of $83.50 per share.

Positive

• Additional $5 billion stock repurchase authorization approved
• Strong liquidity position with over $4 billion available
• Free cash flow projected to exceed $1 billion in 2024
• Low leverage ratio reported
• Previous successful buyback of 36M shares at $83.50 average price

Negative

• Current share price considered undervalued according to management

Insights

Financial Analyst

The $5 billion expanded stock buyback authorization represents a significant capital return initiative, bringing the total available repurchase capacity to $6.4 billion. This aggressive move, coupled with CBRE's strong financial position including $4 billion in liquidity and projected annual free cash flow exceeding $1 billion, signals management's confidence in the company's valuation and future prospects.

The historical buyback execution at a weighted average price of $83.50 per share demonstrates disciplined capital deployment. With low leverage and robust cash generation from its diversified business model, CBRE has substantial flexibility to execute this expanded program while maintaining operational investments. The timing suggests management views current stock prices as attractive relative to long-term growth potential.

Market Research Analyst

This substantial buyback expansion comes at a strategic time in the commercial real estate market cycle. Despite industry headwinds including higher interest rates and office sector challenges, CBRE's diverse revenue streams across property management, investment management and advisory services provide resilience. The company's position as the world's largest commercial real estate services firm with operations in over 100 countries offers significant competitive advantages.

The 40%+ increase in buyback authorization reflects strong corporate governance and shareholder-friendly capital allocation, potentially providing meaningful support for the stock price while maintaining strategic flexibility for growth investments and M&A opportunities.

DALLAS--(BUSINESS WIRE)-- CBRE Group, Inc. (NYSE: CBRE) today announced that its Board of Directors has approved an expanded authorization for the repurchase of up to an additional $5 billion of shares.

The expanded authorization is in addition to the existing $4 billion stock repurchase authorization, which had approximately $1.4 billion remaining as of September 30, 2024.

“Share repurchases are a key part of our capital allocation strategy. The expanded authorization is particularly timely given that we believe our shares’ current valuation understates our long-term growth prospects,” said Emma Giamartino, chief financial officer of CBRE.

“We ended the third quarter in exceptionally strong financial position with more than $4 billion of liquidity, low leverage and free cash flow that is on track to exceed $1 billion this year. Supported by our highly resilient and diversified business model, CBRE is very well placed to sustain strong earnings and free cash flow growth well into the future.”

Since 2021, CBRE has repurchased 36 million shares for approximately $3 billion at a weighted average price of approximately $83.50 per share.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website at https://ir.cbre.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241121479854/en/

For further information:

Chandni Luthra – Investors

212.984.8113

Chandni.Luthra@cbre.com

Steve Iaco – Media

212.984.6535

Steven.Iaco@cbre.com

Source: CBRE Group, Inc.

FAQ

How much is CBRE's new stock repurchase authorization worth?

CBRE's Board approved an additional $5 billion stock repurchase authorization, on top of the $1.4 billion remaining from the previous $4 billion program.

What is CBRE's current liquidity position in 2024?

CBRE reported over $4 billion in liquidity as of Q3 2024, with projected free cash flow exceeding $1 billion for the year.

How many shares has CBRE repurchased since 2021?

Since 2021, CBRE has repurchased 36 million shares for approximately $3 billion at a weighted average price of $83.50 per share.

What is the remaining amount from CBRE's previous buyback program?

As of September 30, 2024, approximately $1.4 billion remained from CBRE's previous $4 billion stock repurchase authorization.