Empire State Realty Trust, Inc. (NYSE:ESRT), which is in the reits business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a US$4.8b market cap stock, it seems odd Empire State Realty Trust is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s examine Empire State Realty Trust’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What’s the opportunity in Empire State Realty Trust?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.92% above my intrinsic value, which means if you buy Empire State Realty Trust today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $15.37, there’s only an insignificant downside when the price falls to its real value. What’s more, Empire State Realty Trust’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Empire State Realty Trust look like?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Empire State Realty Trust, it is expected to deliver a relatively unexciting earnings growth of 8.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in ESRT’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on ESRT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Empire State Realty Trust. You can find everything you need to know about Empire State Realty Trust in the latest infographic research report. If you are no longer interested in Empire State Realty Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.