Essex Property Trust (ESS): Evaluating Value After Recent Share Price Dip

Essex Property Trust (ESS) shares have seen some movement over the past month, dipping by about 3%. Investors are keeping an eye on the real estate sector to gauge how these trends may influence long-term value.

See our latest analysis for Essex Property Trust.

While Essex Property Trust has faced a roughly 3% decline this past month, the bigger picture shows momentum has faded a bit after a strong run. The share price is down 6.7% year-to-date with a 1-year total shareholder return of -7.9%. However, longer-term investors are still comfortably ahead with a 3-year total return of 23.8% and a robust 59% gain over five years.

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With shares now nearly 25% below their calculated fair value and trading at a solid discount to analyst price targets, the key question emerges: Is Essex Property Trust a compelling buy at these levels, or are expectations for future growth already baked in?

Most Popular Narrative: 10.8% Undervalued

At $260.80, Essex Property Trust’s shares sit well below the $292.26 fair value estimated by the most widely followed narrative. This suggests an appealing discount for investors ready to act before expectations shift.

Limited new multifamily supply in the company's core markets (especially on the West Coast) is expected to sharply decline by 35% in the second half of 2025. This should reduce competitive pressure and drive higher occupancy and rent growth, positively impacting revenues and net operating income.

Read the complete narrative.

Curious about what’s fueling this bullish valuation? It isn’t just supply constraints. The narrative hinges on major shifts in long-term margins and the bold assumptions behind future earnings multiples. These are figures that may surprise even seasoned REIT investors. Dive in to uncover the full story and see what really drives Essex’s fair value target. Some of the core beliefs here are bound to challenge your expectations.

Result: Fair Value of $292.26 (UNDERVALUED)

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

However, if Southern California's underperformance continues or increased competition from new supply persists, Essex's expected rent growth and earnings could fall short of projections.

Find out about the key risks to this Essex Property Trust narrative.

Build Your Own Essex Property Trust Narrative

If you see things differently or simply want to run your own numbers, you can build a personalized view in just a few minutes with Do it your way.

A great starting point for your Essex Property Trust research is our analysis highlighting 3 key rewards and 3 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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