Is Essex Property Trust, Inc. (ESS) Among The Stocks That Could Surge From LA Wildfires Recovery Efforts?

We recently compiled a list of the 7 Stocks That Could Surge From LA Wildfires Recovery Efforts. In this article, we are going to take a look at where Essex Property Trust, Inc. (NYSE:ESS) stands against the other stocks.

Los Angeles wildfires continue to wreak havoc in the region, taking precious lives and destroying thousands of homes. The LA County Sheriff announced that nearly 10,000 structures were lost in the wildfires, but this number has already gone up and is expected to rise further as the authorities struggle to contain the fires.

Once the dust settles, there will be a huge demand for reconstruction of properties destroyed in the wildfires. The Biden administration has already promised federal reimbursements for the recovery efforts going on. Homebuilders could possibly benefit from this government support and the resulting spending surge as well.

To come up with the list of 7 stocks that could surge from LA wildfire recovery efforts, we considered stocks with a market cap of at least $4 billion.

A Real Estate Investment Trust (REIT) property manager inspecting a newly acquired apartment complex.

Essex Property Trust, Inc. (NYSE:ESS)

BMO Capital Markets upgraded Essex Property trust shares from market perform to outperform as analyst John Kim predicted that the company is ready to experience growth due to the ongoing fire in LA. As a result of the 0.7% loss in Los Angeles’s residential supply, the displaced residents will drive up demand for multifamily housing.

Essex’s balance sheet remains strong, despite increasing costs. Analysts predict 4-5% growth in operational income and estimate its fair value to be $320-$325. This is in addition to a strong history of dividend growth that supports the bull thesis. Regardless of fluctuations in stock prices, the stock remains a valuable choice for investors.

Due to its guarded geographical positioning, Essex has gained value by 13% in the past year. As California has few numbers of new apartments being built and an increase in demand for residential supply due to the LA wildfires, the company is expected to outperform in 2025. Keeping in mind that the company generates 80% business in California, it’s a worthy option to consider.

Overall ESS ranks 2nd on our list of the stocks that could surge from LA wildfires recovery efforts. While we acknowledge the potential of ESS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ESS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article was originally published at Insider Monkey.