Reassessing Empire State Realty Trust (ESRT) Valuation After $386 Million Scholastic Building Acquisition in SoHo

Empire State Realty Trust (ESRT) is making a sizable bet on SoHo with its all cash, 386 million agreement to buy the Scholastic Building, a mixed use asset that could reshape its growth profile.

See our latest analysis for Empire State Realty Trust.

Even with this SoHo deal and a fresh quarterly dividend declaration, sentiment has been cautious. The year to date share price return of negative 33.63 percent and the one year total shareholder return of negative 37.02 percent suggest momentum has been fading despite a mildly positive three year total shareholder return.

If this kind of repositioning has you rethinking your real estate exposure, it could be worth scanning for what else is working and exploring fast growing stocks with high insider ownership.

With shares trading well below analyst targets despite steady revenue growth and a flagship SoHo acquisition in motion, is Empire State Realty Trust now a value play, or is the market simply discounting future upside and leaving little room for a buying opportunity?

Most Popular Narrative: 21.1% Undervalued

With Empire State Realty Trust last closing at $6.75 against a narrative fair value of $8.55, the story leans toward mispriced resilience in a cautious market.

The analysts have a consensus price target of $8.967 for Empire State Realty Trust based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $10.0, and the most bearish reporting a price target of just $8.0.

Read the complete narrative.

Want to see how modest revenue growth, shrinking margins, and a surprisingly rich future earnings multiple still point to upside potential? Unpack the full narrative to see the assumptions driving that gap between today’s price and tomorrow’s projected value.

Result: Fair Value of $8.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising operating costs and ongoing pressure on Observatory tourism mean that even modest revenue growth could struggle to translate into sustainable earnings momentum.

Find out about the key risks to this Empire State Realty Trust narrative.

Build Your Own Empire State Realty Trust Narrative

If you are not fully convinced by this perspective or would rather follow your own research path, you can quickly craft a custom view in minutes, Do it your way.

A great starting point for your Empire State Realty Trust research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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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.

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