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Equity Residential (EQR)
NYSE:EQR

Equity Residential (EQR) AI Stock Analysis

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EQ

Equity Residential

(NYSE:EQR)

Rating:73Outperform
Price Target:
$77.00
▲( 13.89% Upside)
Equity Residential's strong financial stability and positive earnings call highlight its strengths. However, declining revenue, valuation concerns, and regional market challenges temper the overall outlook.
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. SPDR S&P 500 ETF (SPY)

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
72
Positive
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.
Balance Sheet
85
Very Positive
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.
Cash Flow
78
Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.00B2.98B2.87B2.74B2.46B2.57B
Gross Profit
1.67B1.89B1.83B1.75B1.52B1.66B
EBIT
1.12B871.70M1.16B791.52M618.08M765.67M
EBITDA
1.97B2.49B1.78B1.71B2.52B2.13B
Net Income Common Stockholders
996.64M1.04B835.44M776.91M1.33B913.64M
Balance SheetCash, Cash Equivalents and Short-Term Investments
44.53M62.30M50.74M53.87M123.83M42.59M
Total Assets
19.89B20.83B20.03B20.22B21.17B20.29B
Total Debt
7.52B8.43B7.70B7.73B8.65B8.37B
Net Debt
7.48B8.36B7.65B7.68B8.53B8.33B
Total Liabilities
8.32B9.25B8.46B8.52B9.48B9.18B
Stockholders Equity
11.07B11.04B11.09B11.17B10.95B10.53B
Cash FlowFree Cash Flow
1.27B1.25B1.20B1.22B1.09B1.10B
Operating Cash Flow
1.58B1.57B1.53B1.45B1.26B1.27B
Investing Cash Flow
-1.22B-1.18B-409.50M107.79M-434.62M663.59M
Financing Cash Flow
-417.97M-376.95M-1.12B-1.79B-565.06M-1.95B

Equity Residential Technical Analysis

Technical Analysis Sentiment
Negative
Last Price67.61
Price Trends
50DMA
68.99
Negative
100DMA
69.48
Negative
200DMA
70.83
Negative
Market Momentum
MACD
0.05
Positive
RSI
41.25
Neutral
STOCH
13.98
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQR, the sentiment is Negative. The current price of 67.61 is below the 20-day moving average (MA) of 70.11, below the 50-day MA of 68.99, and below the 200-day MA of 70.83, indicating a bearish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 41.25 is Neutral, neither overbought nor oversold. The STOCH value of 13.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 1 New Risks
1.
Certain provisions of Maryland law could inhibit changes in control. Q4, 2024

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
AVAVB
76
Outperform
$28.19B24.669.67%3.46%5.61%19.66%
73
Outperform
$20.23B96.074.92%3.45%6.11%-37.43%
EQEQR
73
Outperform
$26.48B26.389.01%4.02%3.91%8.78%
UDUDR
70
Outperform
$13.08B110.443.40%4.32%2.35%-73.89%
60
Neutral
$2.76B10.590.51%8507.90%5.51%-19.44%
MAMAA
60
Neutral
$18.35B31.799.37%3.91%1.55%0.73%
ESESS
60
Neutral
$17.97B25.7912.09%3.68%7.61%27.83%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EQR
Equity Residential
67.61
5.36
8.61%
AVB
AvalonBay
198.03
11.81
6.34%
MAA
Mid-America Apartment
152.76
27.54
21.99%
ESS
Essex Property
269.47
22.78
9.23%
UDR
UDR
39.47
2.80
7.64%
INVH
Invitation Homes
33.01
0.06
0.18%

Equity Residential Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: -2.76%|
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.

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.