JLL Adds $2.2B To Stock Buyback Runway And Leans Into AI

JLL unveiled its strategy for growth for the rest of the decade, starting with a direct boost to shareholders. 

The brokerage and commercial real estate services giant announced “plans to imminently launch” a $200M stock buyback program as part of the Accelerate 2030 plan that executives rolled out at an investor day conference Thursday. 

The initial buyback is part of a new $2.2B stock repurchase authorization, on top of an $800M buyback also authorized by the board of directors. JLL is targeting an average 16% annual increase to its adjusted earnings per share as the firm boosts revenue and pushes for wider adoption of artificial intelligence across its service lines. 

The $3B repurchase ceiling is the highest in the company’s history and reflects a longstanding view within the firm — and among its peers in the brokerage landscape — that it is underpriced on the public market. JLL has already repurchased $75M worth of its shares this year. 

The aggressive growth forecasts and high buyback authorizations were the standouts of an investor day that focused heavily on technology and artificial intelligence adoption, JPMorgan Chase analysts wrote in a note Friday morning. 

The analysts have an overweight rating on the stock and a $375-per-share price target. The stock was trading up more than 2% Friday morning, just above $300 per share. 

JLL has been an early mover in the proptech space, which had pulled down earnings and dragged on investor sentiment for years, the JPMorgan analysts wrote. 

“But now in an AI-driven world, JLL seems to be ahead of the pack and has already gone through the trial-and-error of figuring out what works when it comes to technology, organizational structure, and how to roll out initiatives — especially in a mature industry like CRE,” they wrote. 

Management told investors at the conference that 40% of the firm's nonreimbursable employees, which includes research, marketing and other support staff, use JLL’s enterprise AI applications daily and that 80% of its investment sales processes are leveraging AI to work on buyer lists.  

JLL is projecting 8% revenue growth on a compounded annualized basis, and management remains focused on investing internally, returning capital to shareholders and M&A. 

“There was no change in these priorities — or the pecking order — but it did seem to open up the door, in our view, to larger scale M&A at some point. This came up in the context of market share in CRE services gravitating to the top players in the industry,” the JPMorgan analysts wrote. 

JLL management views outsourcing of services as a major growth segment and sees opportunities to bring institutional and high net worth individuals into its investor platform at the same time that occupiers are reshaping portfolios across industries, according to an investor day presentation.

The firm framed its Accelerate 2030 strategy around five key themes: growing its operations in sectors where JLL already has scale, deepening client relationships, building a unique platform that offers competitive advantages, outpacing its peers through leveraging data and AI, and investing in its people. 

“These long-term financial targets reflect our confidence in JLL's trajectory and our ability to drive top- and bottom-line growth, margin enhancement and cash generation, through the cycle,” Chief Financial Officer Kelly Howe said in a statement. “As we look ahead, we have the financial strength and flexibility to continue to invest in high-return opportunities while returning capital to shareholders.”