The specter of rising interest rates is one of the main issues that keeps buffeting the stock market and causing some big waves of volatility. While the bank stocks are beneficiaries of rising rates, technology stocks are not, and they have been hammered off and on recently as the 10-year Treasury yield has climbed to its highest level in over a year. For perspective, note that the bond closed Friday at a 1.62% yield, but during the beginning of the financial crisis in 2007 the yield was 5.26%.
BofA Securities analysts recently highlighted a screen of S&P 500 stocks with the highest positive interest rate betas to changes in the 10-year Treasury yield over the past 10 years. We screened that list looking for stocks that are rated Buy at BofA Securities and found five that look like very solid ideas going forward. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
One would think real estate would be hurt by rising rates, but this company is an exception. CBRE Group Inc. (NYSE: CBRE) operates as a commercial real estate services and investment company worldwide.
Its Advisory Services segment provides strategic advice and execution to owners, investors and occupiers of real estate in connection with leasing; property sales and mortgage services under the CBRE Capital Markets brand; property and project management services, including construction management, marketing, building engineering, accounting and financial services for owners of and investors in office, industrial and retail properties; and valuation services that include market value appraisals, litigation support, discounted cash flow analyses and feasibility studies, as well as consulting services, such as property condition reports, hotel advisory and environmental consulting.
The Global Workplace Solutions segment offers facilities management, project management and transaction management services. The Real Estate Investments segment provides investment management services under the CBRE Global Investors brand to pension funds, insurance companies, sovereign wealth funds, foundations, endowments and other institutional investors, and it offers development services under the Trammell Crow brand, primarily to users of and investors in commercial real estate.
The BofA Securities price target for CBRE stock is $90 a share. That is higher than the Wall Street consensus target of $83.33 and Friday’s closing price of $79.08 per share.