Analyst Note
| Michael Wong, CFA, CPA |Narrow-moat rated Cushman & Wakefield posted a solid set of numbers in the third quarter, comfortably beating the FactSet consensus estimate of $0.28 per share with reported adjusted EPS of $0.48. Fee revenue came in strong as the company reported third-quarter fee revenue of $1.7 billion, a 27% increase on a year-over-year basis and a 10% increase from the third quarter of 2019. The company reported third quarter adjusted EBITDA of $219 million, an 85% increase compared to last year and 30% higher than the third quarter of 2019. The adjusted EBITDA margin calculated on a fee-revenue basis was 12.9%, up 405 basis points when compared with third quarter of 2020 and up 200 basis points from third quarter of 2019. The margin expansion in the recent quarters is a result of significant operating leverage in the company’s business model and is positively impacted by strong brokerage activity and savings generated from cost reduction initiatives that the company has taken over the past two years. These results are largely in line with our expectations and we do not plan to materially change our $20.50 fair value estimate for the company as we fully incorporate the third-quarter results.