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CBRE Group, Inc. (CBRE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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CBRE Group, Inc. (CBRE)

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Intrinsic Value (DCF)

Current$170.83
→
Intrinsic$126.89
-26%
$81.80$126.89$212.54
Market implies 24% growth for 5 years
CBRE trades at a premium to our conservative estimate — investors expect above-average performance.
At $171, the market prices in continued strong cash flow growth (24%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $82 → Bull $213. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →13%15%17%19%
8%$157$171$187$204
10%$106$116$127$138
12%$78$86$94$102
14%$60$66$73$79

Bull Case

  • Bull case ($213) offers 24% upside at 21% growth, 9% discount

Bear Case

  • Bear case ($82) implies 52% downside at 14% growth, 12% discount
  • Price reflects 24% growth expectations vs 17% historical — high bar to clear
  • Trading 26% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$1.95B
Year 2$2.29B
Year 3$2.68B
Year 4$3.14B
Year 5$3.67B
Terminal$54.05B

📐 Model Inputs

Growth Rate17.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$1.67BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is CBRE stock undervalued or overvalued?
🔴 OVERVALUED

CBRE trades at $170.83 vs. our DCF-derived intrinsic value of $126.89, implying -24% downside. Using a 10.0% WACC and 17.1% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($194.18) suggests limited upside.

What is CBRE's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.67B, projected at 17.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.58B net debt and dividing by 0.31B shares: Bear $80.24 | Base $126.89 | Bull $194.18. Current price $170.83 implies -24% to base case.

How is CBRE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($43.67B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.2x.