ESS Stock Forecast & Price Target

Essex Property Trust is expected to witness a positive trajectory in its core funds from operations (FFO) per share for 2025 and 2026, with estimates increasing slightly due to improved revenue assumptions that outweigh rising operational expenses. There has been a seasonal bounce back in demand, with occupancy rates climbing to 96.3% in January 2025, indicating strong market fundamentals and a resilient leasing environment, particularly in Northern California. Additionally, the anticipated outperformance in the northern region, bolstered by robust tech job postings and office leasing activity, suggests a favorable outlook for continued growth in the company's West Coast markets.

Essex Property Trust's guidance for 2025 core funds from operations per share (FFO/sh) is projected at $15.56-$16.06, reflecting a 1.3% decrease from prior consensus estimates, indicating a weakening performance outlook. Additionally, the company's expectation of market rent growth lagging at approximately 2% raises concerns about its ability to keep pace with economic conditions, particularly in light of the ongoing impact of remote work trends on occupancy rates in key markets like San Francisco. Furthermore, the long-term implications of reduced tech hiring and a sluggish post-COVID recovery in the West Coast markets suggest potential ongoing challenges for Essex Property Trust in maintaining its revenue and occupancy levels.