Earnings Beat: Empire State Realty Trust, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Empire State Realty Trust, Inc. (NYSE:ESRT) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to US$8.65 in the week after its latest full-year results. It looks like a credible result overall - although revenues of US$763m were what the analysts expected, Empire State Realty Trust surprised by delivering a (statutory) profit of US$0.28 per share, an impressive 250% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Empire State Realty Trust after the latest results.

Check out our latest analysis for Empire State Realty Trust

Following last week's earnings report, Empire State Realty Trust's three analysts are forecasting 2025 revenues to be US$764.0m, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 79% to US$0.06 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$773.3m and earnings per share (EPS) of US$0.035 in 2025. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of US$11.12, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Empire State Realty Trust analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$9.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Empire State Realty Trust's revenue growth is expected to slow, with the forecast 0.1% annualised growth rate until the end of 2025 being well below the historical 3.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Empire State Realty Trust.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Empire State Realty Trust following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$11.12, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Empire State Realty Trust. Long-term earnings power is much more important than next year's profits. We have forecasts for Empire State Realty Trust going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Empire State Realty Trust (at least 2 which can't be ignored) , and understanding them should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.