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Bear Of The Day: Empire State Realty

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Empire State Realty Trust (ESRT - Free Report) is a Zacks Rank #5 (Strong Sell) and sports an "F" for both its Value and Growth Style Scores.  Today, ESRT is the Bear Of The Day, so let's take a look at why that is the case.

Description

Empire State Realty Trust, is a real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world's most famous building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of December 31, 2017, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.

Earnings History

Whenever I see a Zacks Rank #5 (Strong Sell) I look at the earnings history for a clue as to why it holds the lowest Zacks Rank. In the case of ESRT, I see a recent meet, a miss and two beats.

That is not the worst earnings history I have ever seen and hardly enough of a reason for the stock to be the Bear of the Day.

Estimate Revisions

The core of the Zacks Rank is driven by estimate revisions.  ESRT has revisions of late and most are negative.  

I see the Zacks Consensus Estimate for 2018 moving from $1.02 to $0.93 over the last 90 days.  

Similarly, the Zacks Consensus Estimate for 2019 has moved from $1.06 to $0.95.

That downward pressure has caused the Rank to slide in an environment when most stocks are seeing earnings estimate rise.

At the same time, I see things to like here for ESRT.  Revenue for the 2018 year is expected to be $487.7M and that number grows to $500.3M next year. Say what you will, but I am all about revenue growth.  

Chart

Empire State Realty Trust, Inc. Price and Consensus

 

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