Empire State Realty (ESRT) AI Stock Analysis

• Market Cap: $1.44B
• Dividend Yield: 1.64%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 28.2
• Beta (1Y): 1.00
• Revenue Growth: 1.41%
• EPS Growth: 3.11%
• Country: US
• Employees: 667
• Sector: Real Estate
• Sector Strength: 73
• Industry: REIT - Diversified
• EPS (TTM): 0.05
• Shares Outstanding: 167,510,670
• 10 Day Avg. Volume: 1,564,187
• 30 Day Avg. Volume: 1,369,241
• PEG Ratio: -0.03
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.10
• Enterprise Value/Market Cap: 2.17
• Enterprise Value/Revenue: 1.02
• Enterprise Value/Gross Profit: 8.53
• Enterprise Value/Ebitda: 2.25
• 1Y Price Target: $9.46
• Price Target Upside: 8.61% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 69 Neutral
• Price Target: $8.50 ▼(-2.41%Downside)

Empire State Realty's score is driven by stable financial performance and positive earnings call highlights, offset by concerns regarding cash flow management and valuation. Technical analysis supports a stable market position, balancing out some of the valuation concerns.

Positive Factors

Analyst Recommendation

The analyst's recommendation has upgraded ESRT to Outperform from Peer Perform, indicating a positive outlook.

Leasing Activity

Commercial leasing activity was robust with 379k sf leases signed, showing a significant increase compared to the long-term average.

Observatory Performance

Observatory NOI increased 6.0% year over year with a 1.0% increase in visitors, breaking its two-quarter visitor losing streak.

Negative Factors

Consumer and Government Risks

There are signs of potential risk due to government warnings about US travel, which may affect the Observatory's performance.

Economic Sensitivity

A lower multiple is being ascribed to the stock due to the office sector's sensitivity to economic uncertainty.

Valuation

The target price for Empire State Realty Trust has been lowered from $10.00 to $7.50 due to a revised valuation approach.

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 office and retail spaces within its properties. The company's revenue model is based on long-term lease agreements with a variety of tenants, including corporate, professional, and retail clients. A significant portion of its income also comes from the Empire State Building's observatory operations, which attract millions of tourists annually, contributing to both ticket sales and related merchandise. Additionally, ESRT benefits from strategic partnerships and marketing initiatives that enhance its properties' visibility and attractiveness, helping drive occupancy rates and rental income.

Empire State Realty Financial Statement Overview

Summary

Empire State Realty displays stable revenue growth and profitability with a healthy gross profit margin. However, challenges in cash flow management and moderate leverage levels could affect financial flexibility.

Income Statement

Empire State Realty's income statement exhibits stable revenue growth with a TTM revenue of $766.81M, which is a slight decrease from the previous annual figure. The gross profit margin is healthy at 47.76%, and the net profit margin stands at 7.20%, indicating profitability. However, the EBIT and EBITDA margins of 20.00% and 44.42%, respectively, suggest room for improvement in operational efficiency. The revenue growth rate from 2021 to TTM is positive, reflecting a steady upward trend in sales.

Balance Sheet

The balance sheet shows a moderate financial position with a debt-to-equity ratio of 1.17, reflecting a balanced use of leverage. The return on equity (ROE) is relatively low at 3.09%, indicating limited returns to shareholders. The equity ratio of 43.41% showcases a stable equity base but suggests a reliance on debt financing, which could pose risks if interest rates rise.

Cash Flow

Cash flow analysis reveals challenges with a negative operating cash flow of -$20.89M in TTM. However, the company maintains a positive free cash flow of $32.11M, suggesting some capacity to fund operations and investments internally. The free cash flow to net income ratio is 0.58, indicating that a portion of earnings is being converted into cash, though operating cash flow issues warrant attention.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
766.81M	767.92M	739.57M	727.04M	624.09M	609.23M
	Gross Profit
366.25M	413.76M	400.56M	405.69M	344.61M	318.12M
	EBIT
153.43M	158.71M	146.71M	127.03M	79.13M	58.66M
	EBITDA
347.26M	343.53M	336.62M	343.92M	288.66M	251.05M
	Net Income Common Stockholders
55.20M	51.64M	53.24M	63.21M	-13.04M	-22.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
187.82M	385.46M	346.62M	264.43M	423.69M	526.71M
	Total Assets
4.11B	4.51B	4.22B	4.16B	4.28B	4.15B
	Total Debt
2.09B	2.48B	2.27B	2.27B	2.34B	2.17B
	Net Debt
1.90B	2.10B	1.92B	2.01B	1.92B	1.64B
	Total Liabilities
2.33B	2.73B	2.49B	2.48B	2.60B	2.42B
	Stockholders Equity
1.79B	1.03B	985.52M	1.68B	1.68B	1.73B
Cash Flow		Free Cash Flow
32.11M	260.89M	232.49M	84.91M	117.45M	39.17M
	Operating Cash Flow
-20.89M	260.89M	232.49M	211.17M	212.49M	182.29M
	Investing Cash Flow
-7.38M	-397.12M	-77.34M	-230.89M	-212.74M	-143.12M
	Financing Cash Flow
179.88M	158.58M	-62.87M	-140.24M	-93.05M	257.17M

Empire State Realty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.71
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESRT, the sentiment is Positive. The current price of 8.71 is above the 20-day moving average (MA) of 7.86, above the 50-day MA of 7.49, and below the 200-day MA of 9.39, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 69.55 is Neutral, neither overbought nor oversold. The STOCH value of 89.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESRT.

Empire State Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AAT	73 Outperform	$1.24B	15.34	6.74%	6.69%	12.64%	49.11%
AHH	71 Outperform	$714.50M	123.68	3.05%	7.94%	-12.13%	-14.54%
ALEX	70 Outperform	$1.34B	21.59	6.47%	4.94%	4.31%	39.56%
ESRT	69 Neutral	$1.44B	28.19	5.44%	1.64%	1.41%	3.11%
SAFE	67 Neutral	$1.13B	10.67	4.51%	4.48%	1.54%	―
Sector *	61 Neutral	$2.85B	10.99	0.40%	6.10%	5.75%	-21.23%
GNL	57 Neutral	$1.71B	―	-13.01%	9.89%	16.69%	39.04%

Empire State Realty Corporate Events

Empire State Realty Holds Annual Shareholders Meeting

On May 15, 2025, Empire State Realty Trust, Inc. held its annual shareholders meeting where Class A and Class B common stockholders elected the company’s nominees for director, approved executive compensation on a non-binding advisory basis, and ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions reflect the company’s continued commitment to its governance and operational strategies, potentially impacting its market positioning and stakeholder confidence.

The most recent analyst rating on (ESRT) stock is a Sell with a $7.00 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.

Empire State Realty Reports Q1 2025 Financial Results

Empire State Realty Trust announced its financial results for the first quarter of 2025, reporting a net income of $0.05 per share and core funds from operations of $0.19 per share, a slight decrease from the previous year. The company signed leases for approximately 231,000 rentable square feet and maintained a strong liquidity position with $0.8 billion available. The Manhattan office portfolio was 93.0% leased, and the total commercial portfolio was 92.5% leased as of March 31, 2025. Despite a decrease in same-store property cash net operating income due to increased expenses and taxes, the company remains optimistic about future occupancy and leasing percentages, expecting improvements by year-end.

Empire State Realty Announces Board Member Retirement

On March 31, 2025, Thomas J. DeRosa, a longstanding board member of Empire State Realty Trust, Inc., announced his intention to retire and not seek re-election at the upcoming Annual Meeting of Shareholders on May 15, 2025. His departure is not due to any disagreements with the company, and he will continue to serve until the meeting. DeRosa has been a director since the company’s IPO in 2013, and the board and management expressed their gratitude for his significant contributions.