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Equity Residential (EQR)
NYSE:EQR
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Equity Residential
(NYSE:EQR)
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Rating:71Outperform
Price Target:
$68.00
▲(6.05% Upside)
Action:UpgradedDate:02/06/26
The score is driven primarily by solid financial fundamentals and profitability, tempered by a TTM step-down in net income/free cash flow and moderate leverage. Earnings call guidance supports a steady 2026 outlook with high occupancy and expected supply improvement, but near-term pricing power and expense/interest headwinds remain key constraints. Technicals are neutral and valuation is supported by the dividend, though the P/E is not particularly cheap.
Positive Factors
High occupancy & low turnover
Sustained ~96% occupancy and record-low turnover materially reduce vacancy risk and leasing expense over time. Lower churn preserves rent rolls and cuts turnover-related CapEx, supporting steadier FFO, dividend coverage and cash conversion across the next several quarters.
Concentration in top coastal markets
Heavy exposure to SF/NY provides durable earnings resilience from stronger supply/demand dynamics and higher rent tiers. This market mix cushions portfolio-wide results versus expansion markets, supporting margin stability and long-term asset value retention.
Disciplined capital allocation & portfolio rebalancing
Active dispositions of lower-return assets and meaningful buybacks show management prioritizes per-share returns and portfolio quality. Recycling proceeds into buybacks and targeted investments can sustainably boost FFO/share and improve long-run ROE.
Negative Factors
Moderate leverage and refinancing needs
Moderate-to-elevated leverage limits financial flexibility and heightens sensitivity to rising interest rates. Near-term refinancing and planned issuance expose the firm to funding cost volatility that could compress FFO, reduce buyback capacity, or force asset sales if credit conditions tighten.
Weaker TTM cash flow and earnings momentum
A sharp TTM FCF decline reduces internal funding for dividends, buybacks, and reinvestment. If cash conversion weakness persists, management may need to slow distributions or sell assets to preserve liquidity, undermining sustained shareholder returns and capital spending plans.
Limited new-lease pricing & supply pressure in expansion markets
Negative new-lease rates signal constrained pricing power for incoming rents, capping organic revenue growth. Combined with heavy supply in Sunbelt/expansion markets, this structural pressure may restrain revenue and NOI expansion until supply and demand rebalance, slowing long-term FFO growth.
Equity Residential (EQR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.00B
Dividend Yield4.52%
Average Volume (3M)2.70M
Price to Earnings (P/E)21.6
Beta (1Y)0.61
Revenue Growth4.78%
EPS Growth24.74%
CountryUS
Employees2,500
SectorReal Estate
Sector Strength53
IndustryREIT - Residential
Share Statistics
EPS (TTM)1.00
Shares Outstanding377,547,120
10 Day Avg. Volume2,684,852
30 Day Avg. Volume2,699,149
Financial Highlights & Ratios
PEG Ratio2.43
Price to Book (P/B)2.16
Price to Sales (P/S)7.71
P/FCF Ratio18.53
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue10.51
Enterprise Value/Gross Profit22.69
Enterprise Value/Ebitda13.94
Forecast
1Y Price Target
$69.45Price Target Upside8.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)1.4
Revenue Forecast (FY)$3.19B
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 generates revenue primarily through the leasing of residential apartments to tenants. The company earns rental income from its vast portfolio of properties, which includes both market-rate and affordable housing units. Additionally, EQR may benefit from ancillary income sources such as application fees, late fees, and revenue generated from services and amenities offered to residents. The company's performance is influenced by factors such as occupancy rates, rental pricing, and overall demand for residential housing in its targeted markets. Strategic partnerships with property management firms and local businesses can also enhance operational efficiencies and tenant services, contributing to the company's revenue growth.
Equity Residential Key Performance Indicators (KPIs)
Any
Total Properties
Indicates the total number of properties owned, reflecting the company's scale, market presence, and potential rental income sources.
Indicates the total number of properties owned, reflecting the company's scale, market presence, and potential rental income sources.
Data provided by:
The Fly
The FlyEquity Residential Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call presented a cautiously optimistic outlook. Management emphasized strong portfolio fundamentals—high occupancy (96.4%), record-low resident turnover, and outsized contributions from San Francisco and New York (≈30% of NOI)—alongside active capital allocation (>$300M buybacks in 2025 and $1.3B returned to shareholders). They provided constructive 2026 guidance (FFO/share midpoint +2.25%, blended rent growth 1.5%–3%) and a favorable supply backdrop (deliveries down ≈35% in 2026). Counterbalancing this were notable near-term challenges: late‑2025 deceleration in rent momentum, negative new-lease rates across most markets, pressure from high supply in expansion/Sunbelt markets, modest other-income misses, and interest/expense headwinds. Management is focused on selective development, dispositions of lower-return assets, and further automation to drive efficiency. Overall, the positives (occupancy, market concentration in strong markets, buybacks, cost control and supply improvement) outweigh the near-term headwinds, leaving a constructive but cautious tone for 2026.Q4-2025 Updates
Positive Updates
High Portfolio Occupancy
Portfolio physical occupancy of 96.4% in Q4 2025 (portfolio-wide >96%, ~97% in key markets), driven by strong demand, high retention and fewer lease expirations, supporting revenue stability.
Historic Low Resident Turnover and Homebuying Exit Rate
Lowest reported resident turnover for both the fourth quarter and full year in company history; only 7.4% of residents cited 'bought home' as reason for move-out in 2025 (lowest on record), reducing churn-related costs.
Strong Performance in San Francisco and New York
San Francisco and New York were notable bright spots and expected to continue strong results in 2026; together they represent ~30% of NOI and have the best supply/demand outlooks, contributing disproportionate earnings power.
Capital Returned to Shareholders
Company repurchased ~$206M of stock in Q4 and $300M total in 2025; returned over $1.3B to shareholders in 2025 through dividends and repurchases; plans to use disposition proceeds to fund additional buybacks (assumed $200M in H1 2026).
Active Portfolio Rebalancing to Improve Forward Growth
Disposition strategy focused on older/non-core assets with higher CapEx and lower forward return profiles (2025 net sales proceeds $500M) to fund buybacks and improve forward growth and return profile.
2026 Revenue and FFO Guidance with Modest Improvement
2026 normalized FFO per share midpoint of $4.08, up from $3.99 in 2025 (+2.25%); guidance assumes blended rate growth between 1.5% and 3% for 2026 with a 60 basis point embedded growth at the start of the year.
Material Reduction in New Supply Expected
Company tracking shows competitive new deliveries down ~35% (or ~40,000 units) in 2026 vs 2025 and light 2026 starts, creating a favorable supply setup that should reduce supply pressure into 2027.
Operating Efficiency and Technology Initiatives
First-generation centralization/automation initiatives delivered a 15% reduction in on-site payroll (reflected in 1.1% 5-year CAGR in same-store payroll); management expects an additional 5%–10% on-site payroll reduction over next several years via further automation and AI-enabled apps.
Negative Updates
Revenue Momentum Deceleration in Back Half of 2025
Stronger-than-expected rental growth in H1 2025 reversed with a broad deceleration in revenue momentum across most markets in H2 2025 (except SF and NY), particularly pronounced in highly supplied markets due to weaker job and consumer confidence.
Negative New Lease Rates Across Most Markets
Despite a strong achieved renewal rate of 4.5%, the company's blended rate in Q4 was only 0.5% (midpoint) as new lease rates were negative in every market except San Francisco, indicating limited pricing power with new movers.
Expansion Markets Under Pressure from Supply
Expansion markets (Atlanta, Dallas, Denver, Austin), representing just under 11% of NOI, continue to be impacted by high new supply; Denver identified as the weakest of the group while Atlanta shows signs of recovery.
Other Income Shortfall in Q4
Other income growth in Q4 was slightly below expectations driven by a lack of bad debt net improvement and lower-than-expected income from the bulk internet rollout, causing a slight miss to the midpoint.
Expense Headwinds from WiFi Rollout and Utilities
Bulk WiFi rollout will add incremental expenses ($6.8M; ~70 basis points to total expenses) even as it contributes to NOI ($6M in 2026, ~$10M when fully rolled out); utilities expected to significantly outpace inflation in 2026 (though below the ~8% seen in 2025).
Interest Expense and Financing Pressure
Interest expense expected to be a ~$0.05 headwind to normalized FFO per share in 2026 (including $0.04 from JV consolidations, reduced capitalized interest and timing impacts, plus ~$0.01 from refinancings), with assumed debt issuance of $500M–$1B.
Short-Term FFO Drag from Dispositions Timing
2025 dispositions generated ~$500M net proceeds but because many sales occurred late in the year, the timing produces a ~$0.06 drag on 2026 normalized FFO per share (partially offset by planned buybacks).
Wide Revenue Guidance Range and Dependency on Job Growth
2026 revenue guidance range is wider-than-usual, reflecting uncertainty in job growth; achieving the high end would require early-year job market improvement, while continued job weakness could yield flat pricing and lower occupancy (low-end scenario).
Company Guidance
Equity Residential's 2026 guidance assumes a well‑occupied portfolio (portfolio-wide >96%, targeted to run ~96.4% with ~97% in some key markets) and blended same‑store rent growth of 1.5%–3% (midpoint reflecting a continuation of H2‑2025 demand), backed by an embedded 60 bps of revenue growth (including ~20 bps dilution from ~5,000 expansion units) and roughly +40 bps from other income (about a 10 bps bad‑debt improvement plus bulk‑internet growth). Management expects achieved renewal rates to stay near 4.5% (quotes ≈6%, >60% renewal take), a starting gain‑to‑lease of ~1.2%, historically low turnover, and only 7.4% of move‑outs due to home purchases. On costs, same‑store expense growth is guided to 3%–4% (midpoint ~20 bps lower than 2025), utilities to again outpace inflation (but less than the ~8% last year), bulk WiFi rollout (adding 64 properties to the 113 stood up in 2025) will add ~$6.8M (≈70 bps) to total expenses while contributing ~$6M to NOI in 2026 and ~$10M by end‑2027, and payroll—already a 1.1% 5‑year CAGR—should see another 5%–10% on‑site reduction over several years. Normalized FFO/share is bridged from $3.99 in 2025 to a $4.08 midpoint in 2026 (+2.25%) (consolidated lease‑ups +$0.06, other +$0.01), with interest expense a ~$0.05 headwind, transaction activity expected to be neutral to NFFO (reflecting $500M net sales in 2025, $300M repurchased and an assumed additional $200M buyback), year‑end net debt/normalized EBITDAre of 4.3x, and assumed debt issuance of $500M–$1B to refinance a $500M 2.85% note (Nov‑2026) and a $92M stub (Aug).Equity Residential Financial Statement Overview
Summary
Strong underlying profitability and steady multi-year revenue growth, with a notable TTM revenue acceleration and improved EBIT margin. Offsetting this, TTM net income and free cash flow weakened versus 2024, and moderate leverage (debt-to-equity ~0.69–0.80) reduces flexibility if conditions soften.Income Statement
Revenue has grown steadily from 2022–2024 (about +11%, +5%, +4%), and TTM (Trailing-Twelve-Months) shows a sharp acceleration (+49%) alongside consistently strong profitability (gross margin ~63% and net margin ~38% TTM). Operating profitability has also improved versus 2024 (EBIT margin ~35% TTM vs ~29% in 2024). The main weakness is profit volatility: net income fell in TTM versus 2024 despite higher revenue, and 2021 margins were unusually high relative to surrounding years, suggesting earnings can be influenced by non-recurring items.78
Positive
Balance Sheet
The balance sheet looks stable with equity holding around ~$11B across the period and assets around ~$20–21B. Leverage is moderate-to-elevated for the group, with debt-to-equity generally in the ~0.69–0.80 range (2022–2024), which is manageable but leaves less flexibility if financing costs rise or property values soften. Returns on equity have been solid but inconsistent (roughly ~7%–12% over time), and the TTM return on equity (~10.5%) is healthy.74
Positive
Cash Flow
Cash generation is solid with positive operating cash flow and free cash flow each year, and free cash flow has generally covered a large share of net income (about ~0.78–0.87 historically; ~0.80 TTM). However, momentum weakened in TTM: operating cash flow declined versus 2024 and free cash flow dropped sharply (TTM free cash flow growth -21.6%), and cash flow coverage of net income also fell versus 2022–2024 levels—signaling softer near-term cash conversion.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.10B | 2.98B | 2.87B | 2.74B | 2.46B |
| Gross Profit | 1.44B | 1.89B | 1.83B | 1.75B | 1.52B |
| EBITDA | 2.34B | 1.84B | 1.78B | 1.71B | 1.46B |
| Net Income | 1.12B | 1.04B | 835.44M | 776.91M | 1.33B |
Balance Sheet | |||||
| Total Assets | 20.75B | 20.83B | 20.03B | 20.22B | 21.17B |
| Cash, Cash Equivalents and Short-Term Investments | 55.90M | 62.30M | 50.74M | 53.87M | 123.83M |
| Total Debt | 8.78B | 8.43B | 7.70B | 7.73B | 8.65B |
| Total Liabilities | 9.34B | 9.25B | 8.46B | 8.52B | 9.48B |
| Stockholders Equity | 11.04B | 11.04B | 11.09B | 11.17B | 10.95B |
Cash Flow | |||||
| Free Cash Flow | 1.29B | 1.25B | 1.20B | 1.22B | 1.09B |
| Operating Cash Flow | 1.65B | 1.57B | 1.53B | 1.45B | 1.26B |
| Investing Cash Flow | -321.36M | -1.18B | -409.50M | 107.79M | -434.62M |
| Financing Cash Flow | -1.33B | -376.95M | -1.12B | -1.79B | -565.06M |
Equity Residential Technical Analysis
Positive
64.12
Price Trends
62.21
Positive
61.28
Positive
63.16
Positive
Market Momentum
0.46
Positive
56.73
Neutral
46.41
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 64.12 is above the 20-day moving average (MA) of 63.26, above the 50-day MA of 62.21, and above the 200-day MA of 63.16, indicating a bullish trend. The MACD of 0.46 indicates Positive momentum. The RSI at 56.73 is Neutral, neither overbought nor oversold. The STOCH value of 46.41 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $25.14B | 24.00 | ― | 3.83% | 7.06% | 12.05% | |
71 Outperform | $24.00B | 21.65 | 10.14% | 4.52% | 4.78% | 24.74% | |
69 Neutral | $17.23B | 24.85 | 12.09% | 3.98% | 6.92% | 53.76% | |
68 Neutral | $19.84B | 33.33 | 11.22% | 4.81% | 2.38% | 17.42% | |
67 Neutral | $16.07B | 35.40 | 7.67% | 4.42% | 0.91% | 6.55% | |
66 Neutral | $15.02B | 30.74 | 8.49% | 3.90% | 1.41% | -21.93% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
EQR
Equity Residential
64.12
-7.03
-9.88%
AVB
AvalonBay
179.67
-40.73
-18.48%
MAA
Mid-America Apartment
135.87
-25.28
-15.69%
ESS
Essex Property
262.74
-37.50
-12.49%
UDR
UDR
38.09
-5.11
-11.83%
CPT
Camden Property
110.24
-9.22
-7.71%
Equity Residential Corporate Events
Private Placements and Financing
Equity Residential Secures New $2.5 Billion Credit Agreement
Neutral
Dec 4, 2025
On December 3, 2025, Equity Residential‘s ERP Operating Limited Partnership entered into a new $2.5 billion unsecured revolving credit agreement with Bank of America, replacing its existing facility set to mature in 2027. This new agreement, maturing in 2030, allows for potential borrowing increases and features interest rates tied to SOFR, with fees dependent on the credit rating of the partnership’s long-term debt, potentially impacting its financial flexibility and market positioning.
The most recent analyst rating on (EQR) stock is a Buy with a $77.00 price target. To see the full list of analyst forecasts on Equity Residential stock, see the EQR Stock Forecast page.
Business Operations and Strategy
Equity Residential Shares Investor Presentation Materials
Neutral
Dec 1, 2025
On December 1, 2025, Equity Residential announced that it has posted presentation materials on its website for upcoming investor meetings in December 2025. This move indicates the company’s efforts to engage with investors and provide transparency about its operations, potentially impacting its market perception and stakeholder relations.
The most recent analyst rating on (EQR) stock is a Buy with a $77.00 price target. To see the full list of analyst forecasts on Equity Residential stock, see the EQR Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.