Goldman Sachs Downgrades Essex Property Trust (ESS) to Neutral on Valuation
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Price: $247.21 -0.21%
Rating Summary:
11 Buy, 22 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
11 Buy, 22 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Goldman Sachs downgraded Essex Property Trust (NYSE: ESS) from Buy to Neutral with a price target of $177.00 (from $156.00).
Analyst Andrew Rosivach said, "We downgrade shares of Essex Property Trust (ESS) to Neutral from Buy on valuation following the completion of the BRE merger on April 1, 2014. Although our 2015-16 estimates are above consensus, current valuation appears to price in higher estimates. We increase our multiplebased 12-month price target to $177 from $156 due to higher estimates (our target multiple is 24.5x 2014E AFFO), for a total return of 7% including dividends."
"Our 2015 and 2016 estimates are 5.7% and 10.0% above consensus, as we assume 12% annual growth over this period. Same store revenue growth should exceed our apartment coverage by at least 1% in both 2014 and 2015, due to better weighted supply-demand in Essex markets. Meanwhile, we estimate development will add 8.8% to ESS’s FFO during 2015 and 2016, as the BRE pipeline is stabilized and funded at lower capital costs. Please note that our model does not presume opportunistic deleveraging," he added.
For an analyst ratings summary and ratings history on Essex Property Trust click here. For more ratings news on Essex Property Trust click here.
Shares of Essex Property Trust closed at $174.00 yesterday.
Analyst Andrew Rosivach said, "We downgrade shares of Essex Property Trust (ESS) to Neutral from Buy on valuation following the completion of the BRE merger on April 1, 2014. Although our 2015-16 estimates are above consensus, current valuation appears to price in higher estimates. We increase our multiplebased 12-month price target to $177 from $156 due to higher estimates (our target multiple is 24.5x 2014E AFFO), for a total return of 7% including dividends."
"Our 2015 and 2016 estimates are 5.7% and 10.0% above consensus, as we assume 12% annual growth over this period. Same store revenue growth should exceed our apartment coverage by at least 1% in both 2014 and 2015, due to better weighted supply-demand in Essex markets. Meanwhile, we estimate development will add 8.8% to ESS’s FFO during 2015 and 2016, as the BRE pipeline is stabilized and funded at lower capital costs. Please note that our model does not presume opportunistic deleveraging," he added.
For an analyst ratings summary and ratings history on Essex Property Trust click here. For more ratings news on Essex Property Trust click here.
Shares of Essex Property Trust closed at $174.00 yesterday.
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