MizuhoSecurities USA Inc. analyst Rich Anderson cut his investment opinion ofEssex Property TrustInc. to "neutral" from "buy," and decreased hisprice target to $238 from $249.
The analyst wrote in a research report: "Our upgrade ofESS to Buy on 2/8/16 was based on the early-year dislocation in the stock thatwe didn't think was a proper reflection of the company's growth prospects.While we have published multiple reports reciting our concerns for thepotentially lofty situation in Northern California (with the latest tech bustin the not-so-distant past), we concluded that the pullback was overdone. Sincethen, a two considerations have changed: a) ESS stock has recovered, andoutperformed the REITs by over 200bps over a relatively short period, and b)management laid out a cautious stance on Bay Area fundamentals during its 1Q16conference call on Friday. Specifically, it reduced its 2016 economic rentgrowth forecast by 100bps to 6.5%, and observed a choppy and surprisinglysoftening conditions given the heavy dose of supply coming on line in San Franand San Jose in the immediate time-frame."
Sandler O'Neill & Partners LP analyst downgraded his investment opinion of Essex Property Trust to "hold"from "buy."
The analyst wrote in a research report, "While we donot believe this tech boom is over, we do believe there is something amiss withNorthern California apartments, which could be affordability, and thus aftertwo consecutive earnings calls of ESS trying to explain the regional weakness,we don't believe the stock will outperform and thus downgrade to HOLD."