A hypothetical megamerger between Cushman & Wakefield and JLL, two of the three largest brokerage firms, could have significant upside for the firms’ earnings, a new analyst report says.

Raymond James analyst Patrick O'Shaughnessy said such a merger could offer "meaningful strategic benefits" to both firms, including a 20% increase in JLL's earnings per share if it were to acquire Cushman & Wakefield, Seeking Alpha reported Tuesday.

The Raymond James analysis estimated JLL would pay a 50% premium to Cushman & Wakefield's stock price. The report also assumed the firms would cut expenses by eliminating redundancies, potentially leading to layoffs. JLL instituted layoffs in New York City and Chicago last month as part of an effort to "manage costs," Bisnow first reported.

O'Shaughnessy declined to share the details of his analysis. A spokesperson for Cushman & Wakefield declined to comment, and spokespeople for JLL didn't respond to a request.

A merger between these two firms would create a firm that rivals CBRE, the largest brokerage in the industry.

The report follows rumors earlier this year that Cushman & Wakefield and Newmark were exploring a merger of their own, something that Newmark CEO Barry Gosin threw cold water on in August. He said on an earnings call that he doesn't see a strong rationale for large-scale mergers between brokerage firms.

"I think the enormity of friction and the conflicts and the coverage and the crowded nature makes it very difficult for large companies to merge," Gosin said on the August earnings call.

Rumors also swirled around a merger between Cushman & Wakefield and JLL in 2020. Tuesday’s report said that while such a move is hypothetical and neither company has indicated specific interest in a merger, “both firms are generally open to the idea of consolidating M&A.”

Both companies saw their stock prices tick up Tuesday afternoon following the report's release, according to Seeking Alpha, and both outpaced broader market gains Wednesday morning. As of 12:30 p.m. ET Wednesday, JLL's stock was up 2.4% and Cushman's was up 2.8%, beating the 1.3% increase in the S&P 500 index.