tiprankstipranks
Trending News
More News >
Empire State Realty Trust Inc (ESRT)
:ESRT
Advertisement

Empire State Realty (ESRT) AI Stock Analysis

Compare
233 Followers

Top Page

ESRT

Empire State Realty

(NYSE:ESRT)

Rating:59Neutral
Price Target:
$7.50
▲(0.81%Upside)
Empire State Realty's overall stock score is 59, driven by stable financial performance with challenges in cash flow management. The technical analysis suggests bearish momentum, and the valuation appears stretched. Strong leasing performance and strategic initiatives provide some positive outlook but are offset by issues in the Observatory segment and rising expenses.
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 (+53.4% vs. LTM average) with +10.4% cash leasing spreads.
Leasing Performance
Cash re-leasing spreads were strong at +12.1% in ESRT's Manhattan office portfolio.
Negative Factors
Economic Sensitivity
A lower multiple is being ascribed to the stock due to the office sector's sensitivity to economic uncertainty.
Guidance Revision
ESRT cut its FY25 FFOps Guidance by 3.4% to $0.845 with Observatory NOI lowered 7.5%.
Stock 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 (ESRT) vs. SPDR S&P 500 ETF (SPY)

Empire State Realty Business Overview & Revenue Model

Company DescriptionEmpire State Realty Trust, Inc. (ESRT) is a real estate investment trust (REIT) that owns, manages, operates, acquires, and repositions office and retail properties in Manhattan and the greater New York metropolitan area. The company's portfolio is highlighted by its ownership of the Empire State Building, one of the world's most famous office buildings and a major tourist attraction. ESRT focuses on providing high-quality office spaces and retail locations, catering to a diverse range of tenants and businesses.
How the Company Makes MoneyEmpire 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 Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: -6.30%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
Empire State Realty Trust reported strong leasing performance and maintained a robust balance sheet, which supports long-term growth. However, challenges were noted in the Observatory's performance due to adverse weather and reduced tourism, alongside increased operating expenses. Despite these challenges, the company continues to strategically position itself with key acquisitions and a focus on sustainability.
Q2-2025 Updates
Positive Updates
Strong Office Leasing Performance
Approximately 232,000 square feet were leased in Q2 2025, including 202,000 square feet of new Manhattan office leases at double-digit positive mark-to-market leasing spreads. The Manhattan office portfolio is 93.8% leased, with expectations for further leasing and occupancy gains for the full year.
Positive Mark-to-Market Rent Spreads
Empire State Realty Trust achieved its 16th consecutive quarter of positive New York City office mark-to-market rent spreads, with a 12.1% increase in Q2 2025.
Strong Balance Sheet
Empire State Realty Trust reported a strong balance sheet with no floating rate debt exposure, a well-laddered debt maturity schedule, and no unaddressed maturity until December 2026. Net debt-to-EBITDA is at 5.6x as of quarter-end.
Multifamily Portfolio Performance
The multifamily portfolio was 99% occupied and achieved 8% year-over-year rent growth in the second quarter of 2025.
Strategic Retail Acquisition in Williamsburg
Empire State Realty Trust closed on a $31 million acquisition of a prime retail asset on North 6th Street in Williamsburg, Brooklyn, adding to their holdings in a high-foot-traffic area with strategic redevelopment plans.
Negative Updates
Challenges in Observatory Performance
The Observatory faced a 4.3% decline in net operating income year-over-year due to adverse weather conditions and reduced tourism, particularly affecting international visitors.
Increased Operating Expenses
Operating expenses increased by 8.8% year-over-year, primarily due to higher real estate taxes, payroll, and $1.4 million in nonrecurring repair work.
Reduced Observatory NOI Guidance
Revised Observatory NOI guidance for 2025 was adjusted to a range of $90 million to $94 million due to reduced tourism and adverse weather impacts.
Same-Store Property Cash NOI Decline
Same-store property cash NOI was down 3% year-over-year after excluding lease termination fees and nonrecurring revenue items recognized in the second quarter of 2024.
Company Guidance
During the Empire State Realty Trust's second-quarter 2025 earnings call, the management provided several key metrics and guidance for the rest of the year. The company reported a core Funds From Operations (FFO) of $0.22 per diluted share for the second quarter. It achieved a significant office leasing volume of approximately 232,000 square feet, with a 93.8% leasing rate in its Manhattan office portfolio, marking the 16th consecutive quarter of positive mark-to-market rent spreads. The Observatory segment faced challenges with a 4.3% year-over-year decline in net operating income (NOI) to $24 million due to a 2.9% decrease in visitation. Despite these challenges, revenue per capita increased by 2.3% year-over-year. Operating expenses rose by 8.8%, primarily due to increased real estate taxes and repair works. The company revised its 2025 Observatory NOI guidance to a range of $90 million to $94 million, impacting the core FFO guidance, now expected to be between $0.83 and $0.86 per share. The multifamily portfolio reported 8% year-over-year rent growth, with a 99% occupancy rate. Overall, Empire State Realty Trust remains focused on leasing space, selling Observatory tickets, managing its balance sheet, exploring growth opportunities, and achieving sustainability goals.

Empire State Realty Financial Statement Overview

Summary
Empire State Realty demonstrates stable revenue growth and profitability with a healthy gross profit margin. However, challenges in cash flow management and moderate leverage levels could impact financial flexibility, warranting a moderate score.
Income Statement
75
Positive
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
65
Positive
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
60
Neutral
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
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Empire State Realty Technical Analysis

Technical Analysis Sentiment
Negative
Last Price7.44
Price Trends
50DMA
7.99
Negative
100DMA
7.78
Negative
200DMA
8.98
Negative
Market Momentum
MACD
-0.14
Positive
RSI
38.10
Neutral
STOCH
24.95
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 7.44 is below the 20-day moving average (MA) of 7.96, below the 50-day MA of 7.99, and below the 200-day MA of 8.98, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 38.10 is Neutral, neither overbought nor oversold. The STOCH value of 24.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESRT.

Empire State Realty Risk Analysis

Empire State Realty disclosed 59 risk factors in its most recent earnings report. Empire State Realty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Empire State Realty Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.33B17.067.79%4.91%5.60%93.88%
70
Outperform
$1.22B15.046.74%6.77%12.64%49.11%
68
Neutral
$713.48M123.513.05%9.93%-12.13%-14.54%
66
Neutral
£955.68M13.952.04%110.45%11.04%38.13%
62
Neutral
$1.06B9.964.51%4.92%1.54%
59
Neutral
$1.25B32.835.44%1.89%4.36%-8.72%
57
Neutral
$1.57B-13.01%13.25%16.69%39.04%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ESRT
Empire State Realty
7.39
-3.21
-30.28%
ALEX
Alexander & Baldwin
18.27
-0.54
-2.87%
SAFE
Safehold
14.40
-7.92
-35.48%
AHH
Armada Hoffler Properties
6.95
-4.23
-37.84%
AAT
American Assets
19.93
-4.46
-18.29%
GNL
Global Net Lease
7.02
-0.83
-10.57%

Empire State Realty Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Empire State Realty Reports Q2 2025 Financial Results
Positive
Jul 23, 2025

On July 23, 2025, Empire State Realty Trust announced its financial results for the second quarter of 2025, reporting a net income of $0.04 per share and core funds from operations of $0.22 per share. The company signed 232,108 rentable square feet of leases and maintained a strong liquidity position with $0.7 billion and no floating rate debt exposure. The Manhattan office portfolio saw a leasing rate increase to 93.8%, and the company completed the acquisition of a retail asset in Williamsburg, Brooklyn. The Empire State Building Observatory generated $24.1 million in net operating income, and the company continued its stock repurchase program, buying back $2.1 million of common stock during the quarter.

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.

Executive/Board Changes
Empire State Realty Appoints George Malkin to Board
Positive
Jul 14, 2025

Empire State Realty Trust announced on July 14, 2025, that George L. W. Malkin has joined its Board of Directors, effective July 13, 2025. Mr. Malkin, who has a strong background in operational and financial roles, is the son of the company’s CEO and grandson of its Chairman Emeritus. His appointment is expected to bring valuable insights to the board, enhancing the company’s strategic direction and leadership.

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.

Shareholder MeetingsBusiness Operations and Strategy
Empire State Realty Holds Annual Shareholders Meeting
Neutral
May 19, 2025

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.

Financial Disclosures
Empire State Realty Reports Q1 2025 Financial Results
Neutral
Apr 29, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 29, 2025