The real estate market has been booming since the onset of the COVID-19 pandemic because homebuyers have been capitalizing on the low-interest-rate environment and remote working trends. This trend has been continuing so far in 2022 despite surging market volatility, with 45% of the homes being purchased within the last two weeks for the month ended January 27.
In addition to demand for residential and commercial spaces due to the extended remote life and work culture, the commercial real estate sector is also seemingly bullish. Property billionaire Sam Zell said recently, “I think retail is much more of a falling knife than office, and I think that office is likely to recover much quicker than retail.” According to Market Watch, the Global Real Estate Sector market is expected to reach $11.18 trillion in 2025, growing at a 4.1% CAGR.
Given this backdrop, we think it could be wise to bet on fundamentally sound and under-the-radar real estate stocks FirstService Corporation (FSV) and Colliers International Group Inc. (CIGI). Raymond James analysts have upgraded them recently.
FirstService Corporation (FSV)
Headquartered in Toronto, Canada, FSV provides residential property management and other essential property services to residential and commercial customers in the U.S. and Canada. It has two segments: FirstService Residential and FirstService Brands. FSV was recently upgraded by investment analysts at Raymond James to a "buy" rating.
On Oct. 26, 2021, Scott Patterson, CEO, FSV, said, “We are pleased that all of our businesses contributed in delivering strong organic growth. This performance was particularly impressive, given the ongoing labour and resource constraints, which limited our ability to drive further growth. Market demand indicators remain strong and provide us with confidence in navigating through the challenging macroeconomic environment.”
FSV’s revenues increased 14.5% year-over-year to $849.43 million for the third quarter, ended Sept. 30, 2021. Its net earnings were $45.62 million, up 39% year-over-year. Also, its adjusted EPS was t $1.50, up 26.1% year-over-year.
Analysts expect FSV’s revenue to increase 7.8% year-over-year to $3.48 billion in its fiscal 2022. Its EPS is also expected to increase 1.8% year-over-year to $4.5 for fiscal 2022. Over the past year, the stock has gained 16.5% in price to close yesterday’s trading session at $159.38.
FSV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
FSV has an A grade for Sentiment and a B grade for Growth, Momentum, and Stability. Within the Real Estate Services industry, it is ranked #7 of 45 stocks. Click here to see FSV’s ratings for Value and Quality as well.
Colliers International Group Inc. (CIGI)
Headquartered in Toronto, Canada, CIGI provides commercial real estate services to corporate and institutional clients in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Analysts at Raymond James recently upgraded CIGI from “Outperform” to “Strong Buy.”
On Nov. 2, 2021, Jay S. Hennick, Global Chairman & CEO of CIGI, said, “Our proven track record, balanced and diversified business model, unique enterprising culture and significant inside ownership positions us well to continue creating significant value for shareholders in the years to come.”
For its fiscal third quarter, ended Sept. 30, 2021, CIGI’s revenues increased 47.7% year-over-year to $1.02 billion. Its adjusted EPS was $1.27, up 17.6% year-over-year. Furthermore, its total assets were t $3.33 billion for the period ended Sept. 30, 2021, compared to $3.29 billion for the period ended Dec. 31, 2020.
CIGI’s revenue is expected to be $4.14 billion for its fiscal 2022, representing a 7.9% year-over-year rise. Furthermore, its EPS is also expected to grow 6.2% year-over-year to $6.13 for its fiscal 2022. Over the past year, the stock has gained 65.4% in price to close yesterday’s trading session at $146.16.
It is no surprise that CIGI has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Growth and a B grade for Momentum, Stability, and Sentiment.
CIGI is ranked #5 in the Real Estate Services industry. Click here to see the additional POWR Ratings for CIGI (Value and Quality).
FSV shares were trading at $158.83 per share on Tuesday afternoon, down $0.55 (-0.35%). Year-to-date, FSV has declined -19.16%, versus a -5.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
2 Under-the-Radar Real Estate Services Stocks Upgraded by Raymond James StockNews.com
