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

• Market Cap: C$257.96M
• Dividend Yield: 269.2%
• Average Volume (3M): 387.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.55
• 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: 92,358,370
• 10 Day Avg. Volume: 228,725
• 30 Day Avg. Volume: 387,982
• PEG Ratio: 0.21
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 6.42
• P/FCF Ratio: 13.54
• 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$1.15
• Price Target Upside: 1.77% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 47 Neutral
• Price Target: C$1.00 ▼(-11.50% Downside)

The overall stock score reflects significant financial challenges, including declining revenue and high leverage. While technical indicators and corporate events show some positive momentum, the valuation concerns and mixed earnings call sentiment weigh heavily on the score.

Positive Factors

Debt Reduction

Reducing debt levels improves financial stability and lowers interest expenses, enhancing long-term financial health and operational flexibility.

Financial Flexibility

Having no imminent mortgage maturities allows the company to focus on strategic investments and operations without immediate refinancing pressures.

Rent Growth

Consistent rent growth indicates strong demand for properties and supports stable revenue streams, contributing to long-term profitability.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, especially in downturns, potentially impacting long-term sustainability.

Declining Revenue

Declining revenue suggests challenges in maintaining market position and could hinder growth prospects if not addressed.

Decreased Occupancy

Lower occupancy rates can reduce rental income and affect profitability, posing a risk to stable cash flows and long-term financial performance.

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

The financial performance is weak, with declining revenue and profitability, high leverage, and poor cash flow management. The income statement shows substantial losses, and the balance sheet reflects high debt levels and negative returns.

Income Statement

The income statement shows a concerning trend with declining revenue and profitability. The TTM data reveals a significant revenue drop of 15.64% and a negative net profit margin of -154.66%, indicating substantial losses. The gross profit margin remains relatively stable at 75.73%, but the EBIT and EBITDA margins are misleadingly high due to negative net income. Overall, the income statement reflects financial instability and declining performance.

Balance Sheet

The balance sheet indicates high leverage with a debt-to-equity ratio of 1.19 in the TTM period, reflecting significant reliance on debt financing. The return on equity is negative at -36.70%, highlighting poor profitability relative to shareholder equity. The equity ratio is not provided, but the overall financial health appears weak due to high debt levels and negative returns.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 14.15% in the TTM period, indicating reduced cash generation. The operating cash flow to net income ratio is low at 0.17, suggesting challenges in converting income into cash. However, the free cash flow to net income ratio is relatively better at 0.80, indicating some ability to generate cash despite losses. Overall, cash flow management needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	67.79M	92.97M	95.68M	89.25M	76.87M	69.88M
Gross Profit	51.30M	72.87M	75.13M	68.98M	59.52M	53.27M
EBITDA	91.99M	141.51M	-128.84M	142.19M	49.93M	44.67M
Net Income	-149.60M	-64.29M	-114.23M	116.42M	96.14M	118.66M
Balance Sheet
Total Assets	729.73M	865.37M	1.72B	1.94B	1.89B	1.50B
Cash, Cash Equivalents and Short-Term Investments	10.53M	7.77M	6.89M	10.89M	10.35M	10.72M
Total Debt	261.34M	343.89M	992.49M	964.87M	885.33M	710.24M
Total Liabilities	515.33M	604.35M	1.30B	1.39B	1.45B	1.15B
Stockholders Equity	214.40M	261.02M	427.25M	550.15M	441.76M	353.72M
Cash Flow
Free Cash Flow	29.81M	44.09M	35.23M	34.82M	34.70M	30.32M
Operating Cash Flow	36.85M	54.88M	55.21M	58.81M	54.12M	41.26M
Investing Cash Flow	937.82M	881.24M	-14.79M	-113.01M	-191.22M	-78.39M
Financing Cash Flow	-972.58M	-935.24M	-44.42M	54.74M	136.72M	36.54M

European Residential Real Estate ate Investment Trust Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Positive. The current price of 1.13 is above the 20-day moving average (MA) of 1.10, above the 50-day MA of 1.08, and above the 200-day MA of 1.01, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 55.51 is Neutral, neither overbought nor oversold. The STOCH value of 53.33 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRG.UN	76 Outperform	C$896.44M	7.39	6.37%	4.36%	3.83%	63.32%
KMP.UN	71 Outperform	C$1.98B	3.65	18.10%	4.36%	6.19%	79.98%
MI.UN	69 Neutral	C$481.36M	6.43	7.26%	3.91%	-1.21%	―
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
HOM.UN	54 Neutral	C$652.38M	-26.11	-3.64%	4.57%	-6.91%	82.31%
ERE.UN	47 Neutral	C$257.96M	-1.63	-40.17%	269.20%	-33.76%	-125.67%
IIP.UN	47 Neutral	C$1.85B	-18.50	-4.40%	3.01%	1.55%	-401.05%

European Residential Real Estate ate Investment Trust Corporate Events

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.

European Residential REIT Reports Q3 2025 Results Amid Strategic Dispositions

European Residential REIT announced its third-quarter 2025 financial results, highlighting significant strategic moves including the sale of 1,976 residential suites and commercial properties in the Netherlands, Belgium, and Germany, generating €489.2 million. The REIT declared a special distribution to unitholders but ceased regular monthly distributions. The company is working on selling its remaining portfolio, facing challenges such as tax reassessments by the Dutch Tax Authority. Operationally, the REIT saw a 4.7% increase in average monthly rents but experienced a decline in occupancy rates and net operating income margins due to its disposition strategy. Financially, the REIT reported a significant decrease in Funds From Operations and Adjusted Funds From Operations per unit, primarily due to property dispositions, although debt repayment improved interest costs.

ERES Completes Strategic Dispositions and Declares Special Distribution

ERES has completed the sale of residential suites in the Netherlands and commercial properties in Belgium and Germany, resulting in proceeds of approximately €367 million. Following these dispositions, ERES declared a special distribution of €0.90 per unit to its unitholders, payable in Canadian dollars or Euros, with implications for Canadian income tax purposes. The Toronto Stock Exchange will implement due bill trading procedures for this distribution, affecting trading dates and conditions.