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    Essex Property Trust (ESS) valuation after $350m senior notes deal and plans for debt reduction and future growth

    Simply Wall St·12/14/2025 00:24:39
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    Essex Property Trust (ESS) just tapped the bond market, issuing 350 million dollars of 4.875% senior notes due 2036. The company aims to tidy up near term debt and keep some dry powder for future deals.

    See our latest analysis for Essex Property Trust.

    That backdrop helps explain why, despite a 1 month share price return of just over 1% and a recent dividend affirmation, Essex’s 1 year total shareholder return is still negative, even though its 3 year total shareholder return remains firmly positive. This suggests longer term momentum has not fully broken.

    If this kind of balance between income and growth appeals, it is worth comparing Essex with other residential focused names. Then widen the lens to discover fast growing stocks with high insider ownership.

    With shares down over the past year but still trading at a hefty intrinsic discount and below analyst targets, are investors overlooking Essex’s steady cash flows and dividend growth, or is the market already baking in its next leg of expansion?

    Most Popular Narrative Narrative: 9.6% Undervalued

    With Essex Property Trust last closing at 257.62 dollars against a narrative fair value of about 285 dollars, the storyline assumes more upside than the market is pricing today.

    The analysts have a consensus price target of 295.438 dollars for Essex Property Trust based on their expectations of its future earnings growth, profit margins and other risk factors. In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be 2.1 billion dollars, earnings will come to 437.0 million dollars, and it would be trading on a PE ratio of 55.8x, assuming you use a discount rate of 7.2%.

    Read the complete narrative.

    Curious why a slow drip of revenue growth can still command a premium style multiple and shrinking margins, yet imply upside from here? The narrative leans on bold long term profit assumptions, layered onto a rich future earnings multiple that many would reserve for fast growing sectors. Want to see exactly how those moving parts add up to that fair value line? Dive in to unpack the full blueprint behind this valuation call.

    Result: Fair Value of $285.07 (UNDERVALUED)

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

    However, lingering regulatory uncertainty and softer Southern California rent growth could derail those bullish assumptions and challenge the idea of a sustained premium valuation.

    Find out about the key risks to this Essex Property Trust narrative.

    Build Your Own Essex Property Trust Narrative

    If this perspective does not quite align with your own, or you prefer hands on analysis, you can shape a fresh view in minutes, Do it your way.

    A great starting point for your Essex Property Trust research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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    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.