Cushman & Wakefield plc: Initiation of Research Coverage

Monday, August 27, 2018

William Blair & Company initiated research coverage of Cushman & Wakefield plc (CWK $17.55). Cushman & Wakefield is the third-largest commercial real estate (CRE) service provider globally, providing a full suite of services across the Americas, EMEA, and Asia-Pacific.

Analyst Stephen Sheldon estimates the company will generate adjusted earnings per share of $1.44 in 2019 and $1.61 in 2020, and believes that Cushman should deliver at least high-single-digit adjusted EBITDA growth over the next few years, with midsingle-digit revenue growth and continued margin expansion.

“There are three important secular drivers for CRE firms, and we believe Cushman is well positioned to capitalize on these trends,” Sheldon said. “First, real estate customers continue to consolidate CRE vendors to the benefit of larger players. Second, demand for outsourced CRE services is growing, and the larger players have penetrated only a small percentage of the opportunity—companies still attempt to handle a majority of these services internally. Third, institutional ownership of CRE assets is trending higher, and we believe institutions tend to transact more frequently and are more prone to outsourcing.”

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William Blair or an affiliate was a manager or co-manager of a public offering of equity securities of Cushman & Wakefield plc within the prior 12 months.

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William Blair or an affiliate received compensation for investment banking services or non-investment-banking services from Cushman & Wakefield plc within the last 12 months. Cushman & Wakefield plc is or was, within the last 12 months, an investment banking client of William Blair & Company and/or one or more of its affiliates.

Officers and employees of William Blair or its affiliates (other than research analysts) may have a financial interest in securities of Cushman & Wakefield plc.

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Current Ratings Distribution (as of 8/26/18)

Coverage Universe
Outperform (Buy): 66%
Market Perform (Hold): 32%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 23%
Market Perform (Hold): 10%
Underperform (Sell): 0%

* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.

The compensation of the research analyst is based on a variety of factors, including the quality and accuracy of research, client feedback, contributions to other firm departments, competitive factors, and firm profitability.

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Stock ratings and valuation methodologies: William Blair & Company, L.L.C. uses a three-point system to rate stocks. Individual ratings reflect the expected performance of the stock relative to the broader market (generally the S&P 500, unless otherwise indicated) over the next 12 months. The assessment of expected performance is a function of near-, intermediate-, and long-term company fundamentals, industry outlook, confidence in earnings estimates, valuation (and our valuation methodology), and other factors. Outperform (O) – stock expected to outperform the broader market over the next 12 months; Market Perform (M) – stock expected to perform approximately in line with the broader market over the next 12 months; Underperform (U) – stock expected to underperform the broader market over the next 12 months; not rated (NR) – the stock is not currently rated. The valuation methodologies include (but are not limited to) price-to-earnings multiple (P/E), relative P/E (compared with the relevant market), P/E-to-growth-rate (PEG) ratio, market capitalization/revenue multiple, enterprise value/EBITDA ratio, discounted cash flow, and others. Stock ratings and valuation methodologies should not be used or relied upon as investment advice. Past performance is not necessarily a guide to future performance.

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