Empire State Realty (ESRT) AI Stock Analysis

• Market Cap: $981.21M
• Dividend Yield: 2.16%
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.86
• Revenue Growth: 0.45%
• EPS Growth: -24.85%
• Country: US
• Employees: 667
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Diversified
• EPS (TTM): 0.12
• Shares Outstanding: 170,269,290
• 10 Day Avg. Volume: 2,279,696
• 30 Day Avg. Volume: 1,695,434
• PEG Ratio: -2.23
• Price to Book (P/B): 1.04
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 4.41
• Enterprise Value/Market Cap: 3.37
• Enterprise Value/Revenue: 4.31
• Enterprise Value/Gross Profit: 240.99
• Enterprise Value/Ebitda: 9.26
• 1Y Price Target: $7.33
• Price Target Upside: 1.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): $781.12M

• Rating: 61 Neutral
• Price Target: $6.00 ▼(-17.24% Downside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

The score is driven primarily by solid underlying financial performance (notably cash flow strength) and a generally positive earnings-call outlook with clear operational momentum. Offsetting these positives are weak technicals (downtrend across moving averages with negative MACD) and balance-sheet/leverage and margin-quality concerns, while valuation looks only moderate given the P/E and modest yield.

Positive Factors

Cash generation

Robust operating and free cash flow (TTM OCF ~$657M; FCF ~$377M) gives management durable internal funding for capex, debt servicing, buybacks and dividends. Persistent cash generation from stabilized leasing and observatory income supports flexibility versus capital markets.

Leasing momentum & occupancy

Sustained leasing momentum — ~460k sqft in Q4 and ~1.0M sqft in 2025 with portfolio occupancy ~90.3% and office 93.5% — increases rent-roll visibility. High occupancy and long lease terms reduce rollover risk and support steady rental cash flows and rental growth potential.

Portfolio transformation to NYC/high-quality assets

Strategic shift to a 100% New York City, higher-quality portfolio via ~$1B of acquisitions (including all-cash deals) concentrates assets in a deeper, higher-demand market. This enhances pricing power, simplifies operations and supports long-term NOI resilience and capital recycling options.

Negative Factors

Elevated leverage

Material leverage and a sizable debt stock relative to equity constrain financial flexibility. Elevated leverage heightens refinancing and interest-rate exposure, limits capacity for opportunistic investments or additional buybacks, and raises risk if property cash flows soften.

Earnings-quality: gross margin collapse

A dramatic TTM gross margin decline to ~2% versus ~54% in prior years materially weakens earnings quality. Such a swing suggests one-offs or cost mix shifts that reduce the reliability of reported profits and may impair FFO-to-cash conversion until clarified or normalized.

Large FDIC vacancy hit to 2026 cash flow

The 119k sqft FDIC vacatur cuts 2026 core FFO (~$0.03) and lowers same-store NOI growth by ~270bps, with cash rent expected in H2 2027. This concentration-related vacancy creates a multi-quarter cash-flow and leasing headwind and delays full revenue recovery.

Empire State Realty Business Overview & Revenue Model

Company Description

Empire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the World's Most Famous Building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of September 30, 2020, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio. Long the leader in energy efficiency retrofits and Indoor Environmental Quality, Empire State Realty Trust is the first commercial real estate portfolio in the U.S. to achieve the WELL Health-Safety Rating.

How the Company Makes Money

Empire State Realty Trust generates revenue primarily through leasing space in its commercial properties. This includes long-term leases with office tenants and retail tenants, which provide a stable and recurring income stream. Additionally, the company may earn revenue from ancillary services, such as parking and event hosting at the Empire State Building. Significant partnerships with businesses and organizations can further enhance its revenue potential, particularly through promotional agreements and tourism-related activities. Furthermore, ESRT benefits from its focus on sustainability, which can lead to cost savings and increased tenant demand for energy-efficient spaces.

Empire State Realty Financial Statement Overview

Summary

Strong cash generation and improving revenue trend support the score, but elevated leverage and a sharp TTM gross margin deterioration reduce earnings-quality confidence and financial flexibility.

Income Statement

Revenue has been on a clear upward trajectory, accelerating in TTM (Trailing-Twelve-Months) to ~21% growth after low-single-digit growth in 2024. Profitability is generally solid for the business model, with healthy operating and EBITDA margins (TTM EBITDA margin ~49%). However, reported gross margin in TTM collapsed to ~2% versus ~54% in 2022–2024, which raises questions about cost mix or one-time items in the period and reduces earnings quality confidence. Net profit margins are positive (~6–7%) after losses in 2020–2021, but net income is slightly lower in TTM than 2024 despite stronger revenue.

Balance Sheet

Leverage is the main constraint: debt is large relative to equity (about 2.3–2.4x in 2022–2024), and total debt has stayed elevated (~$2.3–$2.5B) while equity is roughly stable (~$1.0B). Returns on equity have improved from negative in 2020–2021 to positive in recent years (~4–6%), but they are still moderate given the leverage profile. Overall asset base is sizable and stable, yet the capital structure leaves less flexibility if property cash flows soften or refinancing conditions tighten.

Cash Flow

Cash generation is a key strength. Operating cash flow is robust and stepped up sharply in TTM (Trailing-Twelve-Months) (~$657M vs. ~$261M in 2024), driving strong free cash flow (~$377M) and a very large TTM free-cash-flow growth rate. Over 2022–2024, free cash flow was generally positive and improved from 2022’s lower level. A watch item is that TTM free cash flow is a smaller share of net income (about 0.30x), indicating the latest period’s cash flow vs. earnings relationship is less favorable than 2023–2024 (where it matched net income).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	768.27M	763.15M	739.57M	707.01M	607.86M
Gross Profit	13.73M	408.99M	400.56M	385.65M	328.38M
EBITDA	374.08M	343.53M	378.52M	382.86M	281.43M
Net Income	47.60M	51.64M	53.24M	40.64M	-6.51M
Balance Sheet
Total Assets	4.47B	4.51B	4.22B	4.16B	4.28B
Cash, Cash Equivalents and Short-Term Investments	166.51M	385.46M	346.62M	264.43M	423.69M
Total Debt	2.51B	2.48B	2.27B	2.27B	2.34B
Total Liabilities	2.65B	2.73B	2.49B	2.48B	2.60B
Stockholders Equity	1.06B	1.03B	985.52M	954.38M	998.13M
Cash Flow
Free Cash Flow	249.05M	260.89M	232.49M	84.91M	117.45M
Operating Cash Flow	249.05M	260.89M	232.49M	211.17M	212.49M
Investing Cash Flow	-550.01M	-397.12M	-77.34M	-230.89M	-212.74M
Financing Cash Flow	0.00	158.58M	-62.87M	-140.24M	-93.05M

Empire State Realty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESRT, the sentiment is Negative. The current price of 7.25 is above the 20-day moving average (MA) of 6.21, above the 50-day MA of 6.39, and above the 200-day MA of 7.23, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 34.43 is Neutral, neither overbought nor oversold. The STOCH value of 22.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESRT.

Empire State Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OLP	71 Outperform	$512.77M	11.02	10.91%	9.03%	7.71%	-5.37%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ESRT	61 Neutral	$981.21M	13.27	4.55%	2.16%	0.45%	-24.85%
GNL	61 Neutral	$2.03B	-8.52	-9.82%	10.29%	-28.94%	-28.24%
AAT	57 Neutral	$1.20B	16.06	5.29%	7.31%	5.95%	5.06%
GOOD	55 Neutral	$608.41M	23.37	5.53%	11.56%	4.95%	-6.49%
AHH	47 Neutral	$503.51M	-81.14	0.55%	9.50%	-39.94%	―

Empire State Realty Corporate Events

Empire State Realty Reports Q4 2025 Results, Highlights NYC Focus

On February 17, 2026, Empire State Realty Trust reported fourth-quarter 2025 net income of $0.12 per fully diluted share and full-year 2025 net income of $0.25, with Core FFO at $0.23 for the quarter and $0.87 for the year, down from 2024, while same-store cash NOI edged higher in the quarter and slightly lower for the year after non-recurring adjustments. The company maintained high occupancy with its commercial portfolio 90.3% occupied, signed over 1 million square feet of commercial leases in 2025, recorded $90.1 million in full-year NOI from the Empire State Building Observatory, completed $417 million of all-cash acquisitions including the Scholastic Building, exited its last suburban office asset to become a 100% NYC commercial portfolio, strengthened its balance sheet with new notes and term loan upsizing, and repurchased common stock ahead of providing a 2026 outlook.

Leasing momentum remained solid with 458,473 square feet executed in the fourth quarter at positive blended office leasing spreads of 6.4%, including long-duration renewals and expansions with tenants such as TJ Maxx, Nespresso, and Burlington Stores that support cash flow visibility. As of December 31, 2025, the portfolio totaled 7.6 million square feet of office, 0.8 million square feet of retail, and 743 residential units with strong occupancy and leasing levels across asset classes, underscoring management’s strategic shift toward concentrated, higher-quality New York City assets and a laddered debt profile with no unaddressed maturities until March 2027.

The most recent analyst rating on (ESRT) stock is a Sell with a $6.80 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.