With a market cap of $26.4 billion, Chicago, Illinois-based Equity Residential (EQR) is a leading publicly traded real estate investment trust (REIT), specializing in high-quality apartment properties across the United States. With a strong presence in dynamic cities like Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, the company is also expanding into Denver, Atlanta, and Austin.
Companies valued at $10 billion or more are generally described as “large-cap” stocks and Equity Residential fits right into that category. Focused on creating thriving communities, Equity Residential emphasizes the acquisition, development, and management of residential properties that attract affluent long-term renters. Its impressive portfolio includes 312 properties with over 84,000 apartment units, underscoring its commitment to excellence in the multifamily housing market.
Shares of EQR are trading 11.9% below their 52-week high of $78.83, reached on Sep. 16. The REIT has decreased 9.8% over the past three months, underperforming the broader Dow Jones Industrials Average’s ($DOWI) marginal return over the same time frame.
However, in the longer term, EQR stock is up 13.6% on a YTD basis, surpassing DOWI’s 12.3% gains. In addition, EQR’s 13% gain over the past 52 weeks, compared to DOWI’s 12.7% returns over the same time frame.
Equity Residential has consistently traded above its 200-day moving average since mid-April. While the stock has also remained above its 50-day moving average during this period, it has experienced fluctuations over the past few months.
Shares of EQR fell 4.8% following its Q3 earnings release on Oct. 30 due to multiple concerns. While the company reported in-line normalized FFO per share of $0.98 and modest rental income growth of 3.4% year-over-year to $748.3 million, its blended lease rate growth dropped to 2%, signaling a deceleration in pricing power. Additionally, higher same-store expense growth relative to revenue growth and a slight sequential decline in weighted average occupancy added pressure on investor sentiment. The increased net debt-to-normalized EBITDAre ratio also heightened concerns about rising leverage levels amid a tightening financial environment.
EQR has underperformed its rival, Essex Property Trust, Inc. (ESS), which gained 13.5% over the past 52 weeks. But, Equity Residential has outperformed ESS’ 12.5% YTD return.
Despite EQR’s outperformance relative to the broader market over the past year, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 27 analysts covering the stock, and as of writing, the stock is trading below its mean price target of $78.70.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- Carnival Corp Generates Huge Free Cash Flow for its FY 2024 - CCL Looks Undervalued
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