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Research Alert: CFRA Keeps Sell Opinion On Shares Of Essex Property Trust, Inc.

· 02/05/2021 06:12

11:10 AM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We keep our $220 target, using forward P/FFO of 18.0x our 2021 FFO estimate, below multifamily REIT average at 22.0x given ESS high concentration to very weak CA markets. With disappointing Q4 2020 FFO of $3.02, an $0.11 miss to consensus, we lower our 2021 FFO estimate by $0.80 to $12.20 and introduce new 2022's at $12.90. Share price for ESS has risen 25% since October lows in anticipation of 2021 cyclical recovery in CA multifamily real estate. We think 2021 recovery could be at risk with possible rebound in second half. New leases in Los Angeles, San Francisco Bay Area, and other CA markets offer free rent up to 2 months and reduced rental rates. Rental concessions on new leases and occupancy at 96.5% (-0.6% Y/Y) reduced total revenue by 8.0%. In Q4 2020, markets with highest Y/Y rental revenue decline were San Francisco (-17.3%), Los Angeles (-13.0%), San Mateo County (-12.0%), Alameda County (-11.5%), and Santa Clara (-10.0%). Only stable markets were in San Diego (-1.4%) and Orange County (-3.5%).