BTIG cuts Equity Residential to Neutral on underperformance in Apartment REITs

BTIG analyst Michael Gorman downgraded Equity Residential to Neutral from Buy with no price target as part of a broader research note on Apartment REITs. The analyst states that the apartment space has underperformed the REIT peer group in 2022 due to concerns regarding the broader housing ecosystem, noting that rent growth and job openings are beginning to decelerate. While the sector has already moved from peak valuations to below-average relative multiples, rising cap rates should continue to put downward pressure on net asset values, Gorman tells investors in a research note, stating that the Apartment sector remains attractive but requires being more "selective".