A month has gone by since the last earnings report for Essex Property Trust (ESS Quick QuoteESS - Free Report) . Shares have lost about 0.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Essex Property Trust due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Essex Property Trust, Inc. before we dive into how investors and analysts have reacted as of late.

Essex Q2 FFO Beats Estimates on Higher Property NOI, ’26 View Raised

Essex Property Trust reported second-quarter 2026 core FFO per share of $4.08, beating the Zacks Consensus Estimate of $4.03. The figure also increased 1.2% from the year-ago quarter.

The outperformance reflected higher same-property and non-same-property NOI. ESS raised its 2026 FFO per share guidance.

Total revenues were $489.05 million, which rose 4.1% year over year and came ahead of the consensus mark of $487.32 million. Same-property revenues and NOI grew 2.7% and 2.6%, respectively, while financial occupancy edged up 10 basis points year over year to 96.3%.

Essex' Same-Property Revenue Momentum Continues

Same-property revenue growth was primarily driven by a 2.2% increase in scheduled rents. Other income contributed another 0.6%, while delinquency reduced growth by 0.1%. Cash concessions and vacancy had no year-over-year impact.

Sequentially, same-property revenues improved 0.8% from the first quarter of 2026. Scheduled rents added 0.9%, and other income contributed 0.2%. These gains were partly offset by a 0.2% vacancy impact and a 0.1% delinquency drag.

Essex Property's Northern California Markets Lead

Northern California remained the strongest part of Essex Property’s West Coast portfolio. Same-property revenues in the region increased 4.4% year over year, while operating expenses declined 1.2%. Regional NOI advanced 6.8%. Northern California also achieved 1.8% sequential revenue growth and a 3.4% increase in NOI.

Southern California revenues grew 1.5%, with NOI up 1.1%. Seattle Metro revenues increased 1.7%, but a 14.2% surge in operating expenses resulted in a 2.7% decline in NOI.

Essex' Occupancy Remains Stable Across Markets

Same-property financial occupancy was 96.3% at quarter-end compared with 96.2% a year earlier and 96.5% at the end of the first quarter. The modest sequential decline accompanied positive revenue growth across the overall portfolio.

Northern California posted the highest occupancy at 96.8%, up from 96.6% a year ago. Seattle’s occupancy was unchanged at 96.4%, while Southern California improved 10 basis points year over year to 95.7%.

Same-property operating expenses increased 2.8% from the prior-year quarter. Despite the expense growth, portfolio NOI reached $316.8 million, up from $308.7 million a year earlier.

Essex Property Advances Its Investment Strategy

During the quarter, a joint venture in which Essex holds a 50% interest sold a 218-unit apartment community in San Jose for $105.3 million. The company’s pro rata share of the transaction was $52.6 million, and it recorded a $9.2 million gain.

Essex also received $87.8 million from the full redemption of three structured finance investments. These investments generated a weighted average return of 11.6%.

Subsequent to quarter-end, another 50%-owned joint venture originated two preferred equity investments totaling $36.2 million, or $18.1 million at Essex’s share. The investments carry an initial preferred return of 11.5%.

Essex Property Maintains Financial Flexibility

Essex ended June with approximately $1.4 billion of liquidity. This included $1.23 billion of available unsecured commitments and $167 million of cash, equivalents, marketable securities and undrawn equity forward contracts.

Net indebtedness to adjusted EBITDAre improved to 5.4X from 5.5X in both the prior quarter and the year-ago period. Debt to total assets was 34%, while 93% of adjusted NOI came from unencumbered assets.

The company repurchased 48,261 shares during the quarter for $11.7 million. Year to date, it bought back 254,001 shares for $61.9 million and retained $500 million of repurchase authority at quarter-end.

Essex Raises Its 2026 Core FFO Outlook

Essex raised its full-year 2026 core FFO guidance to $16.03-$16.25 per share from $15.69-$16.19. The revised midpoint of $16.14 represents a 20-cent increase. For the third quarter, Essex expects core FFO per share of $3.93-$4.05.

Management also lifted its same-property revenue growth outlook to 2.5%-3.1% from 1.7%-3.1%. The NOI growth range was raised to 2.3%-3.3% from 0.8%-3.4%, while the operating expense range was narrowed to 2.5%-3%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

VGM Scores

Currently, Essex Property Trust has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Essex Property Trust has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.