Essex Property Trust downgraded to Neutral at Citi after outperformance

As previously reported, Citi downgraded Essex Property Trust to Neutral from Buy with a price target of $260, down from $280. With Essex having “returned to a premium valuation,” the upside and downside risks seem balanced following the stock’s outperformance versus apartments and the broad REIT sector year-to-date, the analyst tells investors. Looking beyond 2023, a continued lack of new supply in Essex’s markets “creates the potential for outsized rent growth if demand should pick up,” but in the near-term management will likely put forward “a somewhat conservative view of rent growth” for the upcoming 2024 calendar year, the analyst added.