Morgan Stanley, JPMorgan Upbeat On Cushman & Wakefield's Potential

Commercial real estate services company Cushman & Wakefield PLC CWK recently offered 45 million shares in an IPO. With the IPO quiet period expiring, sell-side began coverage has begun for shares of the company.

The Analysts

Morgan Stanley analyst Vikram Malhotra initiated coverage of Cushman & Wakefield with an Overweight rating and $21 price target.

JMP Securities analyst Mitch Germain initiated coverage with a Market Outperform rating and $20.50 price target.

Morgan Stanley: Revenue, Margins to Support Multiples

Cushman's size and global scale position it well to compete against peers, Morgan Stanley's Malhotra said in a Monday note.

Despite indicators suggesting a late cycle in the U.S., the company remains poised to gain share through key hires, cross-selling and bolt-on M&A, the analyst said.

Morgan Stanley forecast several drivers of strong margin expansion over the next two years. The firm estimates 10-percent CAGR for revenue and conservative EBITDA margin growth of 100 basis points, both of which are ahead of consensus estimates.

JMP's Reasons To Be Positive

Largely durable revenue and margin accretion opportunity are the drivers behind JMP's positive stance, Germain said in the initiation note.

Cushman has ample liquidity to pursue M&A, recruit and retain well-regarded producers and attempt technology initiatives, the analyst said. 

The company's recent capital raise accelerates the deleveraging story, according to JMP.

The Price Action

Cushman shares have lost about 0.9 percent since listing Aug. 2. The stock was up 1.64 percent late in Monday's trading session at $17.93. 

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