Valued at a market cap of $19.7 billion, Essex Property Trust, Inc. (ESS) is a real estate investment trust that acquires, develops, redevelops, and manages multifamily residential properties. The San Mateo, California-based company primarily focuses on high-quality multifamily apartment communities in supply-constrained markets along the West Coast of the U.S.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and ESS fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the REIT - residential industry. The company’s key strength lies in its strategic presence in high-demand urban areas like Silicon Valley, Seattle, and Los Angeles, where strong job markets and population growth drive consistent rental demand. It benefits from a well-diversified portfolio of upscale apartment communities and a disciplined investment approach, focusing on long-term property value appreciation, sustainable development, and financial stability.
This residential REIT is currently trading 3.6% below its 52-week high of $317.73, reached on Sep. 17, 2024. Shares of ESS have soared 6.4% over the past three months, outpacing the broader Nasdaq Composite’s ($NASX) 10.6% decline during the same time frame.
In the longer term, ESS has rallied 28.8% over the past 52 weeks, outperforming NASX’s 9.7% return over the same time frame. Moreover, on a YTD basis, shares of ESS are up 7.3%, compared to NASX’s 7.3% downtick.
To confirm its bullish trend, ESS has been trading above its 200-day moving average since the past year, despite some fluctuations, and has remained above its 50-day moving average since early February.
Shares of ESS closed up more than 3% following its Q4 earnings release on Feb. 4. The company delivered a 2.6% year-over-year increase in same-property revenues and a 1.7% annual growth in same-property net operating income, reflecting steady growth in its rental portfolio. Moreover, its core FFO of $3.92 advanced 2.3% from the year-ago quarter and exceeded the consensus estimate of $3.90. Looking ahead, for fiscal 2025, the company expects core FFO to range between $15.56 and $16.06, and projects same-property revenue to grow in the range of 2.3% to 3.8%.
Essex Property Trust’s outperformance looks even more pronounced when compared to its rival, Equity Residential’s (EQR) 16.8% rise over the past 52 weeks and marginal decline on a YTD basis.
Looking at ESS’ recent outperformance relative to the Nasdaq, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 27 analysts covering it, and the mean price target of $311.19 suggests a 1.6% premium to its current levels.
On the date of publication, Neharika Jain 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.
