⏳ Final hours! Save up to 60% OFF InvestingProCLAIM SALE

Scotiabank cuts Colliers stock target

EditorAhmed Abdulazez Abdulkadir
Published 17/04/2024, 14:30
CIGI
-

On Wednesday, Scotiabank revised its price target for Colliers International (NASDAQ:CIGI), a global real estate services and investment management company. The firm's analyst has reduced the price target to $135.00 from the previous figure of $140.00. Despite this adjustment, the analyst maintains a Sector Outperform rating on the stock.

The decision to adjust the price target comes as Colliers International is currently trading at 10.2 times its estimated 2025 enterprise value to EBITDA (EV/EBITDA) and 15.2 times its projected 2025 price to earnings (P/E). Historically, since 2016, Colliers has traded at an average of 11.3 times next twelve months EV/EBITDA, and since 2020, the multiple has been higher at 12.3 times.

The investment management (IM) segment of Colliers now represents 35% of the company's total business in terms of EBITDA, a significant increase from less than 20% up until 2020. This change is noteworthy as alternative asset managers, a category that includes Colliers' IM segment, are valued at considerably higher multiples, approximately 17 times EV/EBITDA, compared to traditional brokerage firms like CBRE, which trade at 10.7 times.

Scotiabank's valuation model for Colliers is based on a sum-of-the-parts approach. According to their Exhibit 8, the model assigns a multiple of 14 times to the investment management division and 11 times to other segments, which include commercial mortgage, leasing, and outsourcing & advisory services. This analytical framework underpins the bank's continued positive outlook on Colliers' shares, despite the price target adjustment.

InvestingPro Insights

As investors consider the revised price target for Colliers International by Scotiabank, it's important to delve into the current financial metrics and market sentiment. According to InvestingPro data, Colliers International has a market capitalization of approximately $5.47 billion. The stock is trading at a high P/E ratio of 76.61, which is above the adjusted last twelve months (LTM) figure of 68.73, indicating a premium valuation relative to its earnings. This is further underscored by a PEG ratio of 2.45 for the same period, suggesting that the stock's price may be outpacing earnings growth.

InvestingPro Tips highlight that Colliers International is expected to be profitable this year, with a net income growth projection that appeals to long-term investors. However, the company is also trading at a high Price/Book multiple of 6.56, reflecting a premium on its net asset value. Notably, Colliers is a prominent player in the Real Estate Management & Development industry, which may justify its valuation to some extent. For investors looking for a more comprehensive analysis, there are additional tips available on InvestingPro, including insights on earnings revisions and stock price volatility.

For those interested in deeper investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where you can access a total of 11 InvestingPro Tips that further detail Colliers International's market position and financial standing.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.