Citi cuts Jones Lang LaSalle target to $240, keeps neutral rating

Citi analysts lowered their price target on Jones Lang LaSalle (JLL) to $240 from $275, maintaining a Neutral rating, while InvestingPro data suggests the stock is undervalued; the adjustment reflects revised operating, financing, and transaction assumptions. The firm's 2025 EPS estimate was slightly decreased to $16.57, while the 2026 EPS estimate was increased to $19.81, with the new price target based on a 14x multiple of the revised 2025 EPS. JLL's Q1 2025 earnings surpassed expectations at $2.31 EPS versus a $2.16 forecast, though revenue slightly missed at $5.7 billion against an expected $5.73 billion.

Analysis

Jones Lang LaSalle (JLL) faces a revised outlook from Citi, with analysts lowering the price target to $240.00 from $275.00 while maintaining a Neutral rating, citing updated operating, financing, and transaction assumptions. This new target is predicated on approximately a 14x multiple of the revised fiscal year 2025 adjusted EPS estimate of $16.57, a slight decrease from the earlier prediction of $16.89, and a 9x 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple. Despite Citi's adjustment and InvestingPro data indicating four analysts have recently revised earnings estimates downward for the upcoming period, the stock, currently trading at $221.15, is suggested by InvestingPro analysis to be undervalued, with broader analyst targets ranging from $235 to $349. JLL recently reported Q1 2025 earnings per share of $2.31, surpassing the $2.16 forecast, and demonstrated a 28% year-over-year growth in adjusted EPS; however, revenue of $5.7 billion slightly missed the $5.73 billion expectation. The company has maintained its full-year adjusted EBITDA target, signaling confidence amidst what analysts term 'shifting market dynamics' and 'macroeconomic uncertainties'. Notably, Citi's forecast for JLL's fiscal year 2026 EPS has been upwardly revised to $19.81 from $19.48, suggesting a more positive longer-term earnings trajectory. JLL currently trades at an EV/EBITDA multiple of 10.1x and a P/E ratio of 19.59x, while recent governance enhancements, including the appointment of Catherine Clay to the board, aim to support JLL's growth strategy.

Key Decisions for Investors

• Investors should weigh Citi's cautious near-term outlook, reflected in the lowered price target and FY2025 EPS adjustment, against JLL's recent Q1 EPS outperformance, maintained full-year EBITDA guidance, and InvestingPro's suggestion of undervaluation.
• Consider the current valuation, with an EV/EBITDA of 10.1x, in the context of Citi's $240 price target, which implies modest upside from the current $221.15 price, and the positive adjustment to Citi's FY2026 EPS forecast, indicating potential longer-term growth.
• Monitor upcoming earnings reports for sustained revenue generation, particularly given the slight Q1 miss, alongside broader real estate market transaction volumes and evolving analyst consensus, as these factors will be critical in assessing JLL's performance against revised expectations.