What Is the Outlook for Empire State Realty Trust Shares?

One of the standouts of today's aftermarket trading session was Empire State Realty Trust, which logged a 3.6% performance and outperformed the S&P 500 by 4.4%. The Real Estate Investment Trust (REIT) stock is now trading at $7.43 per share and may still have upside potential because it is still -11.02% under its average target price of $8.35. Analysts have set target prices ranging from $5.5 to $10.25 dollars per share, and have given the stock an average rating of hold.

To understand the market's outlook on the stock, we can look at Empire State Realty Trust 's short interest: the proportion of the share float that is tied to short positions. Behind each short position is an investor who believes that the stock will decline in the future. Here, the stock's short interest is 10.9% which means the outlook is split.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

Another way to gauge the sentiment on Empire State Realty Trust is to look at the percentage of institutions that are invested in the stock. In this case, 99.1% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.

If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.

Analyst coverage, short ratio, and institutional ownership say a lot about how the market views a stock. But markets can be wrong. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.

Here's a snapshot of some important facts to keep in mind about ESRT:

  • The stock has trailing 12 month price to earnings (Eps) of $0.05 per share

  • Empire State Realty has a trailing 12 month Price to Earnings (P/E) ratio of 148.6 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 1.3 in contrast to the S&P 500's average ratio of 2.95

  • Empire State Realty is a Real Estate company, and the sector average P/E and P/B ratios are 27.16 and 2.39 respectively

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The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.