Goldman Sachs thinks business actual property large Cushman & Wakefield could have a tricky time navigating the present macro setting. The financial institution downgraded the inventory to impartial from purchase on Monday. It additionally reduce its worth goal on Cushman to $11 per share from $15.50 per share, implying upside of about 12% from Thursday’s shut. Goldman famous that the corporate is extremely leveraged, which is including to issues over its outlook on the inventory, whereas the corporate additionally maintains an uneven free cash-flow conversion. Goldman added that Cushman’s curiosity bills have additionally risen significantly as benchmark charges proceed to climb. “As brokerage enterprise topline slows down considerably, and curiosity bills stay elevated, we count on EBITDA to deteriorate,” Goldman’s Chandni Luthra mentioned. “In consequence, we count on CWK’s leverage ratio to trace barely greater in 2023.” CWK YTD mountain Shares of Cushman and Wakefield have been beneath immense strain to this point this yr, and Goldman Sachs does not count on an organization restoration this yr. Shares of Cushman are down practically 21% in 2023, because the broader business actual property sector faces turmoil. Goldman is pessimistic towards a complete get better within the sector this yr, and its earlier bullish sentiment towards Cushman was partially primarily based on the corporate’s expectation that lending charges would stay steady. In the meantime, a tightening of liquidity will proceed to pose a problem to actual property traders, Goldman estimates, which can “greater than offsets any tailwinds from probably decrease charges.” “As such, we’re cautious on CRE transaction and the lending market in 2023, and count on the restoration anticipated by the corporate beforehand in late 2023 is prone to be postponed into 2024, and that an excessive amount of much less pronounced as earlier than,” Chandni mentioned. — CNBC’s Michael Bloom contributed to this report.