It has been about a month since the last earnings report for Essex Property Trust (ESS). Shares have lost about 0.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Essex Property Trust due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Essex Property Trust, Inc. before we dive into how investors and analysts have reacted as of late.
Essex Property Q2 Core FFO & Revenues Beat Estimates, ’25 Views Raised
Essex Property reported second-quarter 2025 core FFO per share of $4.03, which beat the Zacks Consensus Estimate of $3.99. The figure also improved 2.3% from the year-ago quarter.
Results reflected favorable growth in same-property revenues and NOI. However, same-property operating expenses and interest expenses partly dampened the performance. Essex Property raised its full-year 2025 guidance at the midpoint for core FFO per share.
Total revenues of $469.8 million outpaced the Zacks Consensus Estimate by 0.14%. Revenues were up 6.2% year over year.
Quarter in Detail
In the second quarter, Essex Property’s same-property revenues increased 3.2% from the prior-year period, ahead of our estimate of 2.3%. Same-property operating expenses rose 2.9% year over year compared with our estimate of 3.8%.
The same-property NOI jumped 3.3% year over year. It also came ahead of our estimate of 1.7%.
Financial occupancies of 96.2% in the second quarter remained unchanged year over year and decreased 10 basis points sequentially. Our estimate was 96.6%.
However, interest expenses increased 9.7% year over year to $64.2 million. We estimated the same to grow by 7.7%
Portfolio Activity
In the second quarter, Essex Property acquired two apartment home communities comprising 420 units located in Northern California for $240.5 million.
In April 2025, the company sold a 350-unit apartment home community in Santa Ana, CA, for $239.6 million.
Balance Sheet
Essex Property had $1.5 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of July 25, 2025. Essex Property exited the second quarter of 2025 with cash and cash equivalents, including restricted cash, of $67.9 million, down from the $107.9 million recorded at the end of the prior quarter.
During the second quarter, Essex Property did not repurchase any shares through its stock repurchase plan.
Guidance
For the third quarter of 2025, Essex Property projects core FFO per share in the range of $3.89-$3.99.
For full-year 2025, the company projects core FFO per share in the range of $15.80-$16.02, up from the earlier guided range of $15.56-$16.06, increasing by 10 cents at the midpoint.
The full-year guidance is based on projections for the same-property revenue growth of 2.90-3.40%, an operating expense increase of 3-3.5% and a NOI expansion of 2.7-3.5%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Essex Property Trust has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Essex Property Trust has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Essex Property Trust, Inc. (ESS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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