Empire State Realty (ESRT) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: 1.84%
• Average Volume (3M): 1.50M
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.96
• Revenue Growth: 1.41%
• EPS Growth: 3.11%
• Country: US
• Employees: 667
• Sector: Real Estate
• Sector Strength: 56
• Industry: REIT - Diversified
• EPS (TTM): 0.05
• Shares Outstanding: 167,510,670
• 10 Day Avg. Volume: 1,366,445
• 30 Day Avg. Volume: 1,498,480
• PEG Ratio: 3.77
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.92
• Enterprise Value/Market Cap: 2.43
• Enterprise Value/Revenue: 1.02
• Enterprise Value/Gross Profit: 8.51
• Enterprise Value/Ebitda: 2.25
• 1Y Price Target: $9.58
• Price Target Upside: 29.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 64 Neutral
• Price Target: ―

Empire State Realty's stock score of 64 reflects stable financial performance with consistent revenue growth, tempered by cash flow challenges and moderate leverage. Technical indicators suggest a bearish trend, while the valuation indicates potential overvaluation. Positive earnings call highlights strong leasing and rent performance, though concerns about occupancy and tourism present risks.

Positive Factors

Earnings Outlook

Earnings are expected to be steady, which is favorable given the low growth environment for real estate investment trusts.

Leasing Activity

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

Stock Recommendation

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

Negative Factors

Income Sources

About 25% of net operating income comes from the Observatory, which may be impacted by consumer weakness and increased competition.

Sector 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. (ESRT) is a leading 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 flagship asset is the Empire State Building, one of the most iconic landmarks in the world, which includes both office and retail components alongside its famous observatory. ESRT's portfolio is complemented by a range of other high-quality office and retail properties, making it a significant player in the commercial real estate sector.

How the Company Makes Money

Empire State Realty Trust generates revenue primarily through leasing office and retail space, with its properties strategically located in high-demand areas. A significant portion of its income comes from leasing office spaces to a diverse range of tenants, including corporations, startups, and other businesses, ensuring a steady stream of rental income. The company also earns substantial revenue from its retail spaces located at street level, which attract a variety of retailers looking to capitalize on high foot traffic areas. Additionally, the Empire State Building's observatory is a key revenue driver, attracting millions of tourists annually, contributing significantly to the company's earnings. ESRT's revenue model is further strengthened by its strategic management and repositioning efforts, which enhance property value and attract premium tenants. The company's financial performance is also supported by partnerships with brokers, marketing agencies, and tourism operators, which help maximize occupancy rates and visitor numbers.

Empire State Realty Financial Statement Overview

Summary

Empire State Realty demonstrates stable revenue growth and profitability with a TTM revenue of $766.81M. The gross profit margin is healthy at 47.76%, but the company shows challenges in cash flow management with a negative operating cash flow of -$20.89M. The balance sheet reflects moderate leverage with a debt-to-equity ratio of 1.17, and a low return on equity of 3.09%.

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
385.46M	385.46M	346.62M	264.43M	423.69M	526.71M
	Total Assets
4.51B	4.51B	4.22B	4.16B	4.28B	4.15B
	Total Debt
2.48B	2.48B	2.27B	2.27B	2.34B	2.17B
	Net Debt
2.10B	2.10B	1.92B	2.01B	1.92B	1.64B
	Total Liabilities
2.73B	2.73B	2.49B	2.48B	2.60B	2.42B
	Stockholders Equity
1.03B	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: Negative
• Last Price: 7.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 7.39 is below the 20-day moving average (MA) of 7.45, below the 50-day MA of 7.50, and below the 200-day MA of 9.53, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 42.68 is Neutral, neither overbought nor oversold. The STOCH value of 19.06 is Positive, 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
AHH	73 Outperform	$736.79M	127.54	3.05%	10.38%	-12.13%	-14.54%
AAT	73 Outperform	$1.21B	15.00	6.74%	6.96%	12.64%	49.11%
ALEX	67 Neutral	$1.29B	20.84	6.47%	5.04%	4.31%	39.56%
ESRT	64 Neutral	$1.28B	25.09	5.44%	1.84%	1.41%	3.11%
SAFE	60 Neutral	$1.11B	10.46	4.51%	4.57%	1.54%	―
Sector *	60 Neutral	$2.82B	10.38	0.33%	8508.19%	5.98%	-17.49%
GNL	60 Neutral	$1.73B	―	-13.01%	13.08%	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.