Assessing Empire State Realty Trust (ESRT) Valuation After a 35% Year-to-Date Share Price Decline

Empire State Realty Trust (ESRT) has quietly slipped this year, with the stock down roughly 35% year to date and about 13% over the past 3 months, despite modest revenue growth.

See our latest analysis for Empire State Realty Trust.

That slide has come as investors reassess REIT risk and higher-for-longer rates, with the share price now at $6.58 and short term momentum clearly fading even though multi year total shareholder returns have been roughly flat overall.

If ESRT's recent weakness has you rethinking where you hunt for returns, this could be a good moment to explore fast growing stocks with high insider ownership as a fresh set of ideas.

With Empire State Realty Trust now trading well below analyst targets, yet facing slowing earnings and rising rate headwinds, investors are left with a crucial question: is this a contrarian buying opportunity, or is the market already discounting future growth?

Most Popular Narrative Narrative: 23% Undervalued

With Empire State Realty Trust last closing at $6.58 versus a narrative fair value of $8.55, the gap reflects a bold call on future fundamentals.

Ongoing portfolio modernization and demonstrated leadership in sustainability and energy efficiency strengthens ESRT's competitive position, enabling premium rents, attracting high-quality tenants, and supporting net margin expansion as tenants increasingly seek sustainable space and as operating costs are optimized.

Read the complete narrative.

Curious how modest growth assumptions can still back a punchy valuation multiple? The narrative leans on slow burning revenue gains and surprisingly resilient margins. Want to see the full math behind that stance?

Result: Fair Value of $8.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softness in Observatory income and rising operating expenses could quickly undermine the bullish thesis if tourism and cost pressures persist for longer than expected.

Find out about the key risks to this Empire State Realty Trust narrative.

Another View: Valuation Signals Are Mixed

While the narrative model sees Empire State Realty Trust as about 23 percent undervalued, our SWS DCF model points the other way, suggesting the shares are trading above a fair value estimate of $5.54. Is the market mispricing long term cash flows, or is sentiment already too cautious?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Empire State Realty Trust for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 910 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Empire State Realty Trust Narrative

If you see the story differently or would rather dig into the numbers yourself, you can build a custom narrative in just minutes: Do it your way.

A great starting point for your Empire State Realty Trust research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

Ready for more compelling investment ideas?

Before you move on, consider your next opportunity set with targeted screeners on Simply Wall St that surface quality candidates most investors are overlooking.

• Capture potential turnaround stories early by scanning these 3631 penny stocks with strong financials that already show improving fundamentals and room for upside re-rating.
• Position your portfolio for structural growth by targeting these 29 healthcare AI stocks transforming diagnostics, treatment pathways, and medical efficiency worldwide.
• Boost your income stream and reduce guesswork by filtering for these 12 dividend stocks with yields > 3% that aim to balance yield with sustainability and financial strength.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com