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Equity Residential (EQR)
NYSE:EQR
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Equity Residential
(NYSE:EQR)
76Outperform
Positive Factors
Investment and Recovery Potential
EQR made a compelling case that the time is now to invest in EQR, due to favorable supply/demand dynamics, a data-enhanced operating portfolio that should deliver $50-60M NOI uplift by 2030, and a strong West Coast recovery.
Lease Rates and Growth
EQR had a sequential and year-over-year improvement in new lease rates, consistent with CoStar asking rates.
Negative Factors
Guidance and Market Expectations
Maintained guidance is below Street expectations, suggesting that simply meeting guidance may not be sufficient this year.
Market and Regional Performance
Expansion markets and Denver experienced a decline in blended rates during the first quarter.
Equity Residential (EQR) vs. S&P 500 (SPY)
Market Cap
$28.03B
Dividend Yield3.8%
Average Volume (3M)2.32M
Price to Earnings (P/E)27.9
Beta (1Y)0.72
Revenue Growth3.91%
EPS Growth8.78%
CountryUS
Employees2,500
SectorReal Estate
Sector Strength67
IndustryREIT - Residential
Share Statistics
EPS (TTM)0.67
Shares Outstanding379,943,660
10 Day Avg. Volume2,226,319
30 Day Avg. Volume2,318,475
Financial Highlights & Ratios
PEG Ratio-7.34
Price to Book (P/B)2.40
Price to Sales (P/S)0.00
P/FCF Ratio20.93
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue2.25
Enterprise Value/Gross Profit15.88
Enterprise Value/Ebitda3.59
Forecast
1Y Price Target
$78.45Price Target Upside9.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Equity Residential Business Overview & Revenue Model
Company DescriptionEquity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract high quality long-term renters. Equity Residential owns or has investments in 305 properties consisting of 78,568 apartment units, located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver.
How the Company Makes MoneyEquity Residential makes money primarily through the rental income generated from its extensive portfolio of residential properties. The company's revenue model is based on leasing apartments to tenants, who pay rent on a monthly basis. This rental income is the core revenue stream for EQR, and it is supplemented by ancillary income from services such as parking fees, pet fees, and other tenant-related charges. The company strategically invests in and manages properties in markets with strong demand and limited supply to ensure stable occupancy rates and the potential for rent growth. Additionally, EQR may engage in property sales and acquisitions to optimize its portfolio, generating capital gains from the sale of properties that have appreciated in value. Equity Residential's earnings are further supported by its ability to maintain high occupancy levels and implement rent increases in line with market conditions.
Equity Residential Financial Statement Overview
Summary
Equity Residential presents a generally positive financial position with strong cash flows and a debt-free balance sheet, enhancing its stability and reducing financial risk. While operational margins are robust, the declining revenue trend and moderate net income margins pose potential challenges for future growth.Income Statement
The Gross Profit Margin for TTM is approximately 42.31%, indicating healthy profitability. However, the Net Profit Margin is lower at 27.94%, showing some pressure on net income. Revenue has decreased from $2.87 billion in 2023 to $2.19 billion TTM, reflecting a negative growth trend. The EBIT Margin is 30.02%, and the EBITDA Margin is 61.56%, both indicating efficiency in operations, though overall revenue contraction is a concern.72
Positive
Balance Sheet
Equity Residential has a strong Balance Sheet with zero debt in the TTM period, showcasing excellent financial stability. The Equity Ratio stands at 53.00%, reflecting a stable capital structure. Return on Equity (ROE) is 5.56%, indicating moderate returns to shareholders. The lack of debt reduces financial risk significantly.85
Very Positive
Cash Flow
The Operating Cash Flow to Net Income Ratio is 1.98, indicating strong cash generation relative to net income. However, the Free Cash Flow has decreased slightly from $1.20 billion in 2023 to $977 million TTM, showing a reduction in cash available after capital expenditures. The Free Cash Flow to Net Income Ratio is 1.59, suggesting good cash conversion.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.00B | 2.98B | 2.87B | 2.74B | 2.46B | 2.57B | Gross Profit |
| 1.67B | 1.89B | 1.83B | 1.75B | 1.52B | 1.66B | EBIT |
| 1.12B | 871.70M | 1.16B | 791.52M | 618.08M | 765.67M | EBITDA |
| 1.97B | 2.49B | 1.78B | 1.71B | 2.52B | 2.13B | Net Income Common Stockholders |
| 996.64M | 1.04B | 835.44M | 776.91M | 1.33B | 913.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 44.53M | 62.30M | 50.74M | 53.87M | 123.83M | 42.59M | Total Assets |
| 19.89B | 20.83B | 20.03B | 20.22B | 21.17B | 20.29B | Total Debt |
| 7.52B | 8.43B | 7.70B | 7.73B | 8.65B | 8.37B | Net Debt |
| 7.48B | 8.36B | 7.65B | 7.68B | 8.53B | 8.33B | Total Liabilities |
| 8.32B | 9.25B | 8.46B | 8.52B | 9.48B | 9.18B | Stockholders Equity |
| 11.07B | 11.04B | 11.09B | 11.17B | 10.95B | 10.53B |
| Cash Flow | Free Cash Flow | ||||
| 1.27B | 1.25B | 1.20B | 1.22B | 1.09B | 1.10B | Operating Cash Flow |
| 1.58B | 1.57B | 1.53B | 1.45B | 1.26B | 1.27B | Investing Cash Flow |
| -1.22B | -1.18B | -409.50M | 107.79M | -434.62M | 663.59M | Financing Cash Flow |
| -417.97M | -376.95M | -1.12B | -1.79B | -565.06M | -1.95B |
Equity Residential Technical Analysis
Positive
71.56
Price Trends
68.97
Positive
69.52
Positive
70.80
Positive
Market Momentum
0.55
Negative
58.47
Neutral
63.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQR, the sentiment is Positive. The current price of 71.56 is above the 20-day moving average (MA) of 69.93, above the 50-day MA of 68.97, and above the 200-day MA of 70.80, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 63.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EQR.
Equity Residential Risk Analysis
Equity Residential disclosed 47 risk factors in its most recent earnings report. Equity Residential reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Equity Residential Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $28.03B | 27.92 | 9.01% | 3.80% | 3.91% | 8.78% | |
75 Outperform | $29.63B | 25.91 | 9.67% | 3.29% | 5.61% | 19.66% | |
74 Outperform | $21.10B | 100.17 | 4.92% | 3.31% | 6.11% | -37.43% | |
68 Neutral | $19.25B | 27.63 | 12.09% | 3.44% | 7.61% | 27.83% | |
68 Neutral | $14.05B | 118.69 | 3.40% | 4.02% | 2.35% | -73.89% | |
66 Neutral | $19.60B | 33.97 | 9.37% | 3.66% | 1.55% | 0.73% | |
60 Neutral | $2.82B | 10.29 | 0.39% | 8508.26% | 5.90% | -17.41% |
* Real Estate Sector Average
Performance Comparison
EQR
Equity Residential
71.56
7.55
11.80%
AVB
AvalonBay
208.10
16.88
8.83%
MAA
Mid-America Apartment
161.34
29.82
22.67%
ESS
Essex Property
286.49
31.99
12.57%
UDR
UDR
42.23
4.42
11.69%
INVH
Invitation Homes
34.42
0.15
0.44%
Equity Residential Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 2.92%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive aspects such as record low resident turnover, strong occupancy rates, and improvements in markets like San Francisco. However, challenges remain in the Los Angeles and Boston markets, coupled with broader economic uncertainties and potential impacts from new rent control measures. The company appears well-positioned but cautious about future challenges.Q1-2025 Updates
Positive Updates
Record Low Resident Turnover
Resident turnover was reported at only 7.9%, setting a record for the lowest ever reported by the company.
Strong Occupancy Rates
Occupancy was reported at 96.5% across the portfolio, with specific highlights in New York and Washington, D.C., and improvements in Seattle and San Francisco.
Stable Financial Health of Residents
Average household income of new residents increased, and rent-to-income ratios remained favorable at 20%.
San Francisco Market Improvement
San Francisco showed strong momentum with stable high occupancy, declining concessions, and increasing base rents.
Expansion of AI and Automation
The company is expanding deployment of its conversational AI capabilities across the leasing journey, aiming to improve efficiency and customer experience.
Negative Updates
Challenges in Los Angeles Market
The Los Angeles market showed mixed performance with stronger suburban submarkets but weaker urban areas, impacted by a slow recovery in the entertainment industry.
Supply and Economic Uncertainty
Concerns about the higher-than-usual level of economic uncertainty and supply challenges, particularly in the Sunbelt and expansion markets.
Boston Market Weakness
Boston showed weaker new lease pricing in the first quarter with concerns about the potential pullback in research funding and life sciences demand.
Potential Impact of Rent Control
Concerns over new rent control measures in Washington State and Maryland, which could impact future investment and performance in these regions.
Company Guidance
In the Equity Residential First Quarter 2025 Earnings Conference Call, the company reported strong performance with same-store revenue growth exceeding expectations, driven by high physical occupancy at 96.5% and record-low resident turnover at 7.9%. Blended rate growth was at 1.8%, with strong demand in New York, Washington, D.C., Seattle, and San Francisco. The company maintained its guidance for $1.5 billion in acquisitions and $1 billion in dispositions for 2025. Despite uncertainties in the economy related to recent governmental actions and tariffs, the company remains optimistic due to favorable supply and demand dynamics in the rental housing market. Additionally, the company noted that job growth expectations remain solid, and there is a reduced impact from future supply as new apartment starts are expected to decline. Equity Residential also highlighted the strong financial health of their residents, with average household income on the rise and rent-to-income ratios favorable at 20%.Equity Residential Corporate Events
Private Placements and FinancingBusiness Operations and StrategyRegulatory Filings and Compliance
Equity Residential Extends ATM Program for Flexibility
Neutral
May 15, 2025
On May 15, 2025, Equity Residential announced a continuation of its existing ATM Program, allowing for the sale of up to 13,000,000 common shares through a Distribution Agreement with several financial institutions. This strategic move is part of the company’s efforts to enhance its financial flexibility and operational capacity by leveraging forward sale agreements, although it will not initially receive proceeds from these transactions. The company also filed an automatic shelf registration statement to replace the one expiring on May 17, 2025, maintaining its ability to issue securities and manage its share repurchase program.
The most recent analyst rating on (EQR) stock is a Hold with a $68.00 price target. To see the full list of analyst forecasts on Equity Residential stock, see the EQR Stock Forecast page.
Spark’s Take on EQR Stock
According to Spark, TipRanks’ AI Analyst, EQR is a Outperform.
Equity Residential’s overall score reflects its strong financial health, buoyed by a debt-free balance sheet and robust cash flows. Despite facing challenges in revenue growth and specific market conditions, the company maintains an optimistic outlook bolstered by high occupancy rates and strategic initiatives. The stock’s valuation and dividend yield further contribute to its attractiveness, while technical indicators suggest balanced market sentiment.
To see Spark’s full report on EQR stock, click here.
Business Operations and Strategy
Equity Residential Announces Investor Day for 2025
Positive
Feb 25, 2025
On February 25, 2025, Equity Residential announced it will hold an Investor Day featuring presentations by its management team. The event will focus on the company’s portfolio optimization strategy, innovative operating platform, and strong balance sheet, highlighting positive trends in multifamily demand and supply in its markets. This initiative underscores Equity Residential’s strategic positioning for growth and its commitment to fostering thriving communities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.