Essex Property Trust (ESS) Up 4.2% Since Last Earnings Report: Can It Continue?

Core Insights - Essex Property Trust reported a fourth-quarter 2024 core FFO per share of $3.92, beating the Zacks Consensus Estimate of $3.90 and reflecting a 2.3% year-over-year improvement [2] - Total revenues for the quarter reached $454.5 million, exceeding the Zacks Consensus Estimate of $453.1 million, and marking a 7.8% increase year-over-year [3] - For the full year 2024, core FFO per share was $15.60, a 3.8% year-over-year increase, also surpassing the Zacks Consensus Estimate by two cents [3] Financial Performance - Same-property revenues increased by 2.6% year-over-year, which was below the estimated 5.6% [4] - Same-property operating expenses rose by 4.7% year-over-year, compared to an estimate of 7.5% [4] - Financial occupancy was reported at 95.9%, down 20 basis points year-over-year and below the estimated 96.1% [4] Portfolio Activity - In October, Essex Property acquired a 49.9% interest in the BEX II portfolio for $337.5 million, and in November, it acquired another community for $136.1 million [5] - The company disposed of its 81.5% interest in an apartment community in San Mateo, CA, for $252.4 million [6] Balance Sheet - As of December 31, 2024, Essex Property had $1.3 billion in liquidity, with cash and cash equivalents totaling $75.8 million, a decrease from $80.3 million in the previous quarter [7] Guidance - For Q1 2025, Essex Property projects core FFO per share between $3.86 and $3.98, with a midpoint of $3.92 [9] - For the full year 2024, the projected core FFO per share is between $15.56 and $16.06, with a midpoint of $15.81 [9] - The guidance is based on same-property revenue growth projections of 2.25-3.75% and an NOI expansion of 1.4-4.0% [10] Market Outlook - Recent estimates for Essex Property have shown a downward trend, indicating a potential shift in market sentiment [11] - The company holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [13] Industry Comparison - Essex Property Trust is part of the Zacks REIT and Equity Trust - Residential industry, where another player, Equity Residential, reported a 5.4% year-over-year revenue increase [14][15] - Equity Residential has a Zacks Rank 4 (Sell) and a VGM Score of F, similar to Essex Property's performance metrics [16]