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

• Market Cap: C$268.80M
• Dividend Yield: 269.2%
• Average Volume (3M): 387.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.34
• Revenue Growth: -33.76%
• EPS Growth: -125.67%
• Country: CA
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Residential
• EPS (TTM): -0.07
• Shares Outstanding: 93,106,230
• 10 Day Avg. Volume: 228,725
• 30 Day Avg. Volume: 387,982
• PEG Ratio: -0.33
• Price to Book (P/B): 1.63
• Price to Sales (P/S): 4.44
• P/FCF Ratio: 14.77
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$1.17
• Price Target Upside: 1.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.02
• Revenue Forecast (FY): C$17.18M

• Rating: 51 Neutral
• Price Target: C$1.00 ▼(-13.04% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Overall score reflects pressured operating performance (sharp revenue decline, persistent net losses, and a steep 2025 cash-flow drop) partially offset by meaningful balance-sheet de-risking and execution on asset dispositions highlighted on the earnings call. Technicals are mixed/soft and valuation metrics are skewed by losses and an unusually high reported yield, adding uncertainty.

Positive Factors

Balance-sheet deleveraging

Material deleveraging over recent years meaningfully reduces refinancing and liquidity risk. A lower debt-to-equity ratio increases covenant headroom and financial flexibility, making the REIT better able to withstand operating volatility and fund liabilities or opportunistic investments over the next several quarters.

Disposition execution and capital recycling

A large, executed disposition program demonstrates management’s ability to sell non-core assets and crystallize value, generating material cash to repay debt and return capital. This execution reduces portfolio concentration risk and creates a clearer path to fund operations and targeted returns over the medium term.

Rent growth and pricing power

Reported same-property rent increases indicate structural pricing power in core residential assets. Sustainable rent growth supports long-run NOI expansion and helps offset cost inflation, enhancing the reliability of rental cash flows that back distributions and debt servicing over multiple quarters.

Negative Factors

Sharp revenue decline

A near-30% drop in revenue represents a material erosion of the top line that can persistently pressure margins and distributable cash. If driven by asset sales and lost rents, recovery depends on redeploying proceeds into yield-accretive assets or stabilizing occupancy, which can take multiple quarters to execute.

Weakening cash generation

A steep decline in operating and free cash flow reduces the REIT’s internal capacity to fund distributions, capex, and debt service without further asset sales. Persistent lower cash generation erodes the cushion that helped absorb accounting losses, constraining strategic options and increasing reliance on external financing or disposals.

Occupancy and NOI margin pressure

Lower occupancy and a significant drop in NOI margin signal structural earnings degradation from vacancy and higher upkeep costs tied to the disposition strategy. Reduced operating margins weaken cashflow resiliency and extend the time needed to rebuild organic earnings after selling inventory.

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

Company Description

ERES is an unincorporated, open-ended real estate investment trust. ERES's REIT units are listed on the TSX under the symbol ERE.UN. ERES is Canada's only European-focused multi-residential REIT, with a current initial focus on investing in high-quality multi-residential real estate properties in the Netherlands. ERES owns a portfolio of 137 multi-residential properties, comprised of 5,865 suites and ancillary retail space located in the Netherlands, and owns one office property in Germany and one office property in Belgium. ERES's registered and principal business office is located at 11 Church Street, Suite 401, Toronto, Ontario M5E 1W1.

How the Company Makes Money

ERE.UN generates its revenue primarily through the leasing of residential properties to tenants, which provides a steady stream of rental income. The company typically leases its units on long-term contracts, ensuring consistent cash flow. Additionally, ERE.UN may benefit from property appreciation over time, enhancing its asset value. The trust may also engage in selective property development or refurbishment projects to increase rental yields and overall portfolio value. Partnerships with local real estate firms and property management companies can further enhance operational efficiency and tenant satisfaction, contributing to higher occupancy rates and, consequently, increased revenue.

European Residential Real Estate ate Investment Trust Financial Statement Overview

Summary

Mixed fundamentals: revenue fell sharply in 2025 (~29% YoY) and net income has been deeply negative (2023–2025). Balance sheet leverage improved materially (debt-to-equity down to ~0.96x in 2025), but operating/free cash flow weakened significantly in 2025, reducing near-term cushion.

Income Statement

Revenue has deteriorated sharply, with 2025 revenue down ~29% year over year after being roughly flat in 2024. Profitability is unstable: gross margins remain strong (~71–79%), but net income is deeply negative in 2023–2025 (with a particularly weak 2025 net margin), suggesting heavy non-operating charges and/or valuation impacts overwhelming operating performance. EBIT is positive in 2024–2025 but was negative in 2023, reinforcing a choppy earnings profile and limited visibility.

Balance Sheet

Leverage has improved materially over time: debt-to-equity fell from ~2.32x (2023) to ~1.32x (2024) and ~0.96x (2025), indicating meaningful deleveraging and a stronger capital position. However, the business still carries sizable absolute debt and the recent run of net losses (2023–2025) increases the risk that equity and credit flexibility could be pressured if weak results persist.

Cash Flow

Operating cash flow remains positive each year, but has weakened significantly in 2025 (down to ~15.2M vs ~54.9M in 2024), and free cash flow also dropped (~11.5M vs ~44.1M). Cash generation is not keeping pace with the earnings volatility—cash flow is positive while net income is negative, but the ability of operating cash flow to cover accounting losses is low in 2024–2025, pointing to reduced cash cushion. The sharp decline in 2025 free cash flow is a key near-term concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	38.42M	92.97M	95.68M	89.25M	76.87M
Gross Profit	27.17M	72.87M	75.13M	68.98M	59.52M
EBITDA	80.93M	141.51M	-128.84M	142.19M	49.93M
Net Income	-68.95M	-64.29M	-114.23M	116.42M	96.14M
Balance Sheet
Total Assets	329.10M	865.37M	1.72B	1.94B	1.89B
Cash, Cash Equivalents and Short-Term Investments	16.71M	7.77M	6.89M	10.89M	10.35M
Total Debt	100.28M	343.89M	992.49M	964.87M	885.33M
Total Liabilities	224.87M	604.35M	1.30B	1.39B	1.45B
Stockholders Equity	104.22M	261.02M	427.25M	550.15M	441.76M
Cash Flow
Free Cash Flow	11.54M	44.09M	35.23M	34.82M	34.70M
Operating Cash Flow	15.24M	54.88M	55.21M	58.81M	54.12M
Investing Cash Flow	468.72M	881.24M	-14.79M	-113.01M	-191.22M
Financing Cash Flow	-475.02M	-935.24M	-44.42M	54.74M	136.72M

European Residential Real Estate ate Investment Trust Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.15
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERE.UN, the sentiment is Neutral. The current price of 1.15 is below the 20-day moving average (MA) of 1.15, below the 50-day MA of 1.16, and above the 200-day MA of 1.07, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 43.05 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ERE.UN.

European Residential Real Estate ate Investment Trust Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRG.UN	70 Outperform	C$855.95M	8.80	6.37%	4.41%	3.83%	63.32%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
KMP.UN	61 Neutral	C$1.92B	69.28	0.93%	4.42%	6.19%	79.98%
IIP.UN	60 Neutral	C$1.86B	27.54	0.81%	3.01%	1.55%	-401.05%
MI.UN	60 Neutral	C$637.78M	-3.53	7.26%	3.87%	-1.21%	―
ERE.UN	51 Neutral	C$268.80M	-2.47	-40.17%	269.20%	-33.76%	-125.67%
HOM.UN	46 Neutral	C$597.96M	-6.29	-3.64%	4.57%	-6.91%	82.31%

European Residential Real Estate ate Investment Trust Corporate Events

European Residential REIT Advances Portfolio Sell-Off as Earnings Decline

European Residential REIT has accelerated its strategic wind-down, selling 1,980 Dutch residential suites and its Belgian and German commercial properties in 2025 for €489.7 million, and agreeing to sell a further 410 suites for about €88.5 million. It paid a €0.90 per unit special cash distribution and halted regular monthly distributions, while engaging BMO Capital Markets to advise on the ongoing sale of its remaining portfolio amid parallel work on structural and tax matters, including Dutch tax reassessments.

Operationally, the REIT continued to deliver rental growth, with same property occupied average monthly rent rising 5.9% year over year to €1,458 and full-year rental uplift on turnover of 11.4%. However, occupancy in the residential portfolio fell to 89.3% due to intentional vacancies tied to the disposition strategy, and higher costs and lost rent compressed same property NOI margins, contributing to sharp declines in diluted FFO per unit of 83.3% in the quarter and 63.0% for the year as asset sales reduced portfolio income despite lower interest expenses.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Hold with a C$1.00 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.

ERES Sells 88-Suite Dutch Property for €20.6 Million as It Advances Portfolio Sell-Down Strategy

European Residential Real Estate Investment Trust has agreed to sell an unencumbered 88-suite residential property in Schiedam, the Netherlands, for approximately €20.6 million, with closing targeted for March 2026 and proceeds earmarked for general trust purposes. The disposal forms part of a broader strategy of selective asset sales designed to position the remaining Dutch portfolio—including roughly 600 suites still to be sold after completion of four announced single-property transactions—for a potential final en-bloc sale, signalling continued portfolio rationalisation and potential exit optionality for unitholders.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Hold with a C$1.00 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.

ERES to Sell Three Dutch Properties for €68 Million

ERES announced agreements to sell three properties in the Netherlands for approximately €67.8 million, with the sales expected to complete between January and April 2026. The proceeds from these sales will be used for general trust purposes and to repay mortgage debt. This move is part of ERES’s strategy to unlock value through asset sales, positioning the company for a potential en-bloc transaction for its remaining portfolio. The sales are seen as attractive transactions that support the ongoing sale process, with BMO Capital Markets advising on the potential en-bloc transaction.

The most recent analyst rating on ($TSE:ERE.UN) stock is a Hold with a C$1.10 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.