RBC Downgrades Colliers Int'l Amid Valuation Which Is Way Ahead Of Peers

• Colliers International Group Inc CIGI shares have gained 4 percent since August 4.
• RBC Capital Markets’ Anthony Jin downgraded the rating for the company from Outperform to Sector Perform, while reducing the price target from $54 to $47.
• The company’s shares have outperformed peers over the last six months, Jin stated.

Colliers’ shares have declined by merely 4 percent year-to-date, versus a 10 percent decline in the Nasdaq and a 15-22 percent decline of the CRE peers during the same period.

Analyst Anthony Jin wrote, “Global and regional CRE peer valuations have pulled back materially over the last six months on growing unease regarding a potential peaking of the commercial real estate cycle, turmoil in the broader financial markets and lower potential asset values in the face of rising interest rates.”

Colliers’ shares have historically trended with aggregate peer valuation, Jin said. He added that considering the magnitude of the valuation disparity and decelerating growth of investment sales in US dollar terms in the EMEA and APAC, “we believe taking a more neutral stance on shares is prudent.”

The analyst mentioned that CRE fundamentals were supportive of further earnings upside, albeit at a more modest pace. He expects Colliers’ performance in FQ4 and 2015 to have been solid and believes that the company would perform through 2016, driven by organic growth initiatives and an increased pace of M&A.