tiprankstipranks
Trending News
More News >
European Residential Real Estate ate Investment Trust (TSE:ERE.UN)
TSX:ERE.UN
Canadian Market

European Residential Real Estate ate Investment Trust (ERE.UN) AI Stock Analysis

Compare
65 Followers

Top Page

TS

European Residential Real Estate ate Investment Trust

(TSX:ERE.UN)

Rating:64Neutral
Price Target:
C$2.50
▲(0.40%Upside)
The overall stock score is primarily influenced by challenges in financial performance and valuation concerns, particularly due to high leverage and negative profitability. However, positive technical indicators and strategic corporate actions provide some optimism, suggesting potential for stabilization if management successfully executes its strategic initiatives.

European Residential Real Estate ate Investment Trust (ERE.UN) vs. iShares MSCI Canada ETF (EWC)

European Residential Real Estate ate Investment Trust Business Overview & Revenue Model

Company DescriptionEuropean Residential Real Estate Investment Trust (ERE.UN) is a publicly traded real estate investment trust (REIT) focused on investing in high-quality, multi-residential properties located in key European urban centers. The company primarily targets stable, mature markets across Europe, aiming to generate sustainable income and capital appreciation for its investors. ERE.UN's portfolio consists of a diversified mix of residential properties, including apartment buildings and mixed-use developments, which cater to a broad range of tenants.
How the Company Makes MoneyEuropean Residential Real Estate Investment Trust (ERE.UN) makes money primarily through rental income generated from its portfolio of residential properties. The company leases these properties to tenants, collecting regular rental payments, which form the core of its revenue stream. ERE.UN also engages in strategic property acquisitions and developments to enhance its portfolio value and increase rental income potential. Additionally, the company may realize capital gains by selling properties at a profit when market conditions are favorable. ERE.UN's earnings are further supported by its focus on maintaining high occupancy rates and optimizing operational efficiencies, which help maximize net operating income. Partnerships with local property management firms and strategic alliances with developers across Europe also contribute to the trust's ability to effectively manage and grow its portfolio.

European Residential Real Estate ate Investment Trust Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q3-2024)
|
% Change Since: -1.58%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong rent growth and significant asset sales, which are expected to enhance liquidity and reduce debt. However, increased vacancies, decreased NOI margin, and a decline in FFO per unit indicate challenges in maintaining operational efficiency. Overall, the strategic initiatives seem poised to maximize unitholder value, but the execution of these strategies and market conditions will be critical moving forward.
Q3-2024 Updates
Positive Updates
Strong Rent Growth
Average monthly rent increased by 8.4% to EUR 11.41 across all occupied suites by September 30, 2024.
Significant Asset Sales
Announced agreements for the sale of 3,179 residential suites in the Netherlands for approximately EUR 739 million, expected to close by early Q1 2025.
Fair Value Gain
Recognized a fair value gain of EUR 39.4 million, with diluted NAV per unit increasing slightly to EUR 3.01.
Debt Reduction
Debt-to-market value ratio decreased to 53% from 58% at the previous year-end, achieved through redeployment of net disposition proceeds.
Improved Liquidity
Available liquidity increased to nearly EUR 90 million at period end.
Negative Updates
Increased Vacancies
Vacancy rate increased with 95.1% of residential suites occupied at period end, as part of the strategic disposition program.
Decreased Same-Property NOI Margin
Same-property NOI margin decreased to 76.7% from 78.4% compared to the prior year quarter.
Decline in Diluted FFO per Unit
Diluted FFO per unit decreased by 4.8% to EUR 0.04 for the third quarter, primarily due to lower total NOI from dispositions.
Increased Property Operating Costs
Property operating costs increased as a percentage of operating revenues.
Company Guidance
In the third-quarter 2024 earnings call for European Residential Real Estate Investment Trust (ERES), the company provided detailed guidance on its ongoing strategic initiatives. The average monthly rent saw an increase of 8.4% to EUR 11.41, despite a slight rise in vacancies to 95.1% as part of a value maximization strategy. ERES announced agreements to sell 3,179 residential suites in the Netherlands for approximately EUR 739 million, representing about half of its total portfolio. This is expected to close by early Q1 2025, with the proceeds aimed at reducing debt and funding a special cash distribution for unitholders. Year-to-date, ERES also disposed of properties worth EUR 116 million and generated EUR 23 million from selling individual suites. The REIT recorded a fair value gain of EUR 39.4 million this quarter, with the diluted NAV per unit slightly increasing to EUR 3.01. Despite these transactions, the same-property NOI margin dropped to 76.7%, and diluted FFO per unit decreased by 4.8% to EUR 0.04. The debt-to-market value ratio improved, falling to 53% from 58% due to the redeployment of disposition proceeds. Looking forward, ERES plans to use part of the proceeds from upcoming sales to further pay down debt, enhancing its financial stability.

European Residential Real Estate ate Investment Trust Financial Statement Overview

Summary
The company faces challenges with declining revenues and net losses impacting profitability. High debt levels pose financial risk, although cash flow from operations remains positive, providing some liquidity support. Management should focus on improving revenue growth and reducing debt reliance to stabilize the financial condition.
Income Statement
60
Neutral
The company's income statement shows declining revenue and profitability. The TTM (Trailing-Twelve-Months) revenue dropped compared to the previous annual period. Additionally, the net profit margin is negative due to significant net losses, and there is a notable decrease in EBIT and EBITDA margins. However, the gross profit margin remains relatively stable, indicating consistent cost management.
Balance Sheet
55
Neutral
The balance sheet reflects high leverage with a debt-to-equity ratio indicating significant reliance on debt financing. The equity ratio has decreased over time, signaling reduced financial stability. Negative return on equity suggests inefficiency in generating profits from shareholders’ equity. There is a concerning downward trend in stockholders' equity.
Cash Flow
65
Positive
The cash flow statement reveals relatively stable operating cash flows, although there is a drop in free cash flow growth. The company maintains positive operating cash flow to net income ratio, suggesting better cash generation than accounting earnings indicate. However, free cash flow to net income ratio is strained due to negative net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
80.35M92.97M95.68M89.25M76.87M69.88M
Gross Profit
60.85M72.87M75.13M68.98M59.52M53.27M
EBIT
54.19M64.22M-9.04M60.19M-15.79M117.15M
EBITDA
81.78M141.51M-128.84M142.19M49.93M43.51M
Net Income Common Stockholders
-124.28M-64.29M-114.23M116.42M96.14M118.66M
Balance SheetCash, Cash Equivalents and Short-Term Investments
9.53M7.77M6.89M10.89M10.35M10.72M
Total Assets
1.72B865.37M1.72B1.94B1.89B1.50B
Total Debt
987.05M343.89M992.49M964.87M885.33M710.24M
Net Debt
977.52M336.12M985.60M953.99M874.99M699.52M
Total Liabilities
1.27B604.35M1.30B1.39B1.45B1.15B
Stockholders Equity
447.77M261.02M427.25M550.15M441.76M353.72M
Cash FlowFree Cash Flow
34.73M44.09M35.23M34.82M34.70M30.32M
Operating Cash Flow
43.66M54.88M55.21M58.81M54.12M41.26M
Investing Cash Flow
957.76M881.24M-14.79M-113.01M-191.22M-78.39M
Financing Cash Flow
-1.00B-935.24M-44.42M54.74M136.72M36.54M

European Residential Real Estate ate Investment Trust Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.49
Price Trends
50DMA
2.48
Positive
100DMA
2.46
Positive
200DMA
2.22
Positive
Market Momentum
MACD
<0.01
Negative
RSI
50.01
Neutral
STOCH
55.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERE.UN, the sentiment is Positive. The current price of 2.49 is above the 20-day moving average (MA) of 2.48, above the 50-day MA of 2.48, and above the 200-day MA of 2.22, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 50.01 is Neutral, neither overbought nor oversold. The STOCH value of 55.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ERE.UN.

European Residential Real Estate ate Investment Trust Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
C$2.33B3.6722.26%3.65%5.77%108.23%
75
Outperform
C$971.30M8.685.83%4.05%3.85%-31.81%
71
Outperform
C$545.60M5.999.03%3.53%-0.29%
71
Outperform
C$1.91B-7.00%2.84%2.52%-573.45%
66
Neutral
C$972.66M-11.97%4.24%4.39%56.33%
64
Neutral
C$581.04M-37.33%6.25%-7.34%-966.70%
61
Neutral
$2.82B10.890.42%8438.96%5.74%-20.95%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ERE.UN
European Residential Real Estate ate Investment Trust
2.50
1.18
89.39%
TSE:KMP.UN
Killam Apartment REIT Un
19.45
2.71
16.19%
TSE:MRG.UN
Morguard NA REIT UN
18.40
3.42
22.83%
TSE:IIP.UN
InterRent REIT Un
13.60
2.00
17.24%
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
14.36
-0.48
-3.23%
TSE:HOM.UN
BSR Real Estate Investment Trust
18.00
3.16
21.29%

European Residential Real Estate ate Investment Trust Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
ERES Secures Strong Support at 2025 Annual Meeting
Positive
Jun 4, 2025

At the 2025 Annual Meeting, European Residential Real Estate Investment Trust (ERES) announced that all items of business were approved by a significant majority of votes. The election of trustees and the re-appointment of auditors were confirmed, with nominees receiving over 96% of votes in favor. This strong support reflects confidence in ERES’s strategic direction and management, reinforcing its position in the European real estate market.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

Dividends
ERES Announces May 2025 Monthly Distribution
Neutral
May 15, 2025

European Residential Real Estate Investment Trust (ERES) has announced a May 2025 monthly cash distribution of €0.005 per Unit and Class B LP Unit, equivalent to €0.06 annualized. This distribution will be paid in Canadian dollars unless registered unitholders opt for Euros, with payment scheduled for June 16, 2025. ERES continues to prioritize regular monthly distributions, subject to the Board’s discretion, reinforcing its commitment to providing consistent returns to its stakeholders.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Buy with a C$3.50 price target. To see the full list of analyst forecasts on European Residential Real Estate ate Investment Trust stock, see the TSE:ERE.UN Stock Forecast page.

M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
ERES Announces Q1 2025 Results Amid Strategic Asset Sales
Neutral
May 7, 2025

ERES reported its first quarter 2025 results, highlighting significant strategic initiatives, including the disposal of ten residential properties in the Netherlands for €90 million and an agreement to sell additional entities owning 1,446 residential suites for approximately €337.3 million. The proceeds from these transactions are intended to repay debt and distribute a special cash dividend. Despite strong rental growth and increased average monthly rents, the REIT faced a decline in occupancy rates and net operating income margins due to higher vacancies and increased costs. Financial performance showed a decrease in Funds From Operations due to property dispositions, though liquidity remains strong with debt coverage metrics within covenant thresholds.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
European Residential REIT Announces Strategic Property Dispositions and Q1 2025 Financial Results
Neutral
May 7, 2025

European Residential REIT reported its first-quarter results for 2025, highlighting strategic initiatives and financial performance. The REIT disposed of ten residential properties in the Netherlands for €90 million and entered into an agreement to sell additional entities owning 1,446 residential suites for approximately €337.3 million. These transactions are part of a broader strategy to maximize the value of its portfolio. Despite strong rental growth, the REIT experienced a decrease in occupancy rates and net operating income margin due to intentional vacancies and increased costs. Financially, the REIT saw a significant drop in Funds From Operations due to property dispositions, although liquidity remains robust.

Dividends
ERES Announces April 2025 Monthly Distribution
Neutral
Apr 15, 2025

European Residential Real Estate Investment Trust (ERES) has declared its April 2025 monthly cash distribution of €0.005 per Unit and Class B LP Unit, equivalent to €0.06 annualized. The distribution will be paid in Canadian dollars, with an option for registered Unitholders to receive it in Euros. ERES plans to continue regular monthly distributions, subject to the discretion of its Board of Trustees.

M&A TransactionsBusiness Operations and Strategy
ERES Announces €362 Million in Strategic Dispositions
Positive
Apr 2, 2025

European Residential Real Estate Investment Trust (ERES) has announced strategic dispositions amounting to €362 million, involving the sale of residential suites in the Netherlands. The proceeds from these sales will be used to repay mortgage debt and provide a special distribution to unitholders, potentially impacting the company’s financial structure and market positioning. The pending sale, expected to close by mid-September 2025, highlights ERES’s strategic focus on optimizing its portfolio and enhancing shareholder value.

Dividends
ERES Announces March 2025 Monthly Distribution
Neutral
Mar 17, 2025

European Residential Real Estate Investment Trust (ERES) has declared a March 2025 monthly cash distribution of €0.005 per Unit and Class B LP Unit, payable on April 15, 2025. This distribution, which can be received in Canadian dollars or Euros, reflects ERES’s commitment to regular monthly distributions, reinforcing its position in the European real estate market.

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.