M
organ Stanley analyst Ronald Kamdem has upgraded CBRE Group Inc (NYSE:CBRE) to Overweight from Equal-Weight, raising the price forecast to $160 from $115. The company's strong market position in both stable and cyclical business lines makes it well-positioned for double-digit earnings growth. Stable recurring businesses like mortgage servicing, property management, and valuation account for 60% of expected 2025 EBITDA, while higher-margin cyclical businesses like leasing, capital markets, and development make up the remaining 40%.

    Kamdem has raised the 2025 transaction volume forecast to $450 billion, a 13% year-over-year increase. Although this is down from the peak of $700 billion in 2021-2022, the analyst sees room for further margin expansion and operating leverage.

    The company is expected to generate $1.1 billion in free cash flow (FCF) in 2025 and $1.3 billion in 2026, with a solid FCF conversion rate of around 60%. CBRE plans to use excess cash for strategic acquisitions and share repurchases, including recent deals like Direct Line Global and J&J Worldwide Services.

    With a strong FCF outlook and authorized share repurchases totaling $9 billion, the analyst has raised the price target, reflecting expectations for higher growth driven by a commercial real estate recovery. The potential total return is 29%.