Is CBRE Group Inc Class A (CBRE) overvalued?
On Equity Rank's model estimate, CBRE trades 20% above its fair value. CBRE Group Inc Class A (CBRE) last closed at $135.51; the multi-method model fair value is $112.93.
| Price | Model fair value | Price vs model |
|---|---|---|
| $135.51 | $112.93 | 20% above |
What the answer rests on
- 4 of 9 valuation methods put CBRE's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, CBRE's free cash flow would need to grow about 15.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -6.4% a year.
- CBRE trades at 30.2 times its last year's earnings, against a median of 26.8 for 107 profitable Real Estate companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 7% above to 27% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind CBRE's fair value · What prices assume · Other companies