EPRT Stock Forecast & Price Target

Essential Properties Realty Trust Inc. demonstrates robust financial health and growth potential as indicated by its sector-leading AFFO growth, projected at a compound annual growth rate (CAGR) of approximately 9.0% for the period between 2024 and 2026, significantly outperforming the sector average of 3.5%. The company maintains a favorable dividend payout ratio alongside strong earnings growth, suggesting efficient capital management and a focus on sustainability in its financial practices. Additionally, with a rising annual investment volume projected to reach $1.3 billion and an impressive average lease escalation of 2.3%, Essential Properties is well-positioned to capitalize on market opportunities and enhance its cash flow.

Essential Properties Realty Trust Inc. has experienced a year-to-date underperformance of -2.6%, contrasting sharply with its peers which have posted gains of +13.0%, resulting in a compression of its valuation multiple to 14.2x compared to 13.3x for the industry. Despite management's guidance indicating a projected 7% earnings growth for 2026, which surpasses the sector average of 3.5%, investor confidence is faltering, as evidenced by the declining AFFO multiple, dropping from approximately 17x to 15.7x. Moreover, the prevailing rising and volatile interest rate environment poses additional risks to external growth prospects, further contributing to a negative outlook for the stock.