Valued at a market cap of $19 billion, Essex Property Trust, Inc. (ESS) is a real estate investment trust (REIT). The California-based company is engaged in the acquisition, development, redevelopment, and management of multifamily residential properties in selected West Coast markets, including Los Angeles, Orange, the San Francisco Bay Area, and the Seattle metropolitan areas.
Shares of this REIT have slightly underperformed the broader market over the past 52 weeks. ESS has gained 24.2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 24.8%. But, in 2024, shares of ESS are up 19.7%, surpassing SPX’s 17.7% gain on a YTD basis.
Zooming in further, ESS has lagged behind Tidal Home Appreciation U.S. REIT ETF’s (HAUS) 26.3% gain over the past 52 weeks. Meanwhile, on a YTD basis, the stock has marginally outperformed the ETF’s 19.5% return.
ESS reported Q2 earnings results on July 30, with funds from operations (FFO) of $3.94 per share and revenue of $442.4 million, surpassing estimates. The better-than-expected performance was driven by an increase in Same-Property revenues and favorable consolidated net operating income growth. Additionally, the company raised its full-year core FFO guidance, which exceeded Wall Street expectations.
For the current fiscal year, ending in December, analysts expect ESS’s FFO to grow 3.3% year over year to $15.53 per share. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a “Hold.” That’s based on five “Strong Buy” ratings, two “Moderate Buys,” 15 “Holds,” and three “Strong Sells.”
On Aug. 26, Truist Securities maintained a “Hold” rating on Essex Property Trust and raised the price target to $294, noting benefits for the company from limited new housing supply and high cost of single-family homes in its operational markets.
As of writing, the company is trading above its mean price target of $278.83. The Street-high price target of $327, implies a potential upside of 10.4% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
