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1. Company Snapshot

1.a. Company Description

Equity 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.

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1.b. Last Insights on EQR

Negative drivers behind Equity Residential's recent performance include the company's announcement of a leadership transition, with Chief Investment Officer Robert A. ("Bob") Garechana assuming the role of Executive Vice President and Chief Investment Officer, and Alexander ("Alec") Brackenridge transitioning to Executive Vice President – Investments and retiring at a later date. Additionally, the company's recent earnings release date announcement may indicate a potential delay in reporting its second quarter 2025 operating results, which could lead to increased uncertainty and volatility in the stock price.

1.c. Company Highlights

2. Equity Residential's 2025 Earnings: A Challenging Path to Guidance

Equity Residential's 2025 same-store NOI results matched initial guidance, with the company reporting actual EPS of $1.03, slightly below estimates of $1.04. The company's revenue growth was driven by stronger-than-expected rental growth in the first half of the year, followed by a deceleration in the latter part of the year. The company's portfolio occupancy remained strong, at over 96%, and it expects to maintain this level in 2026.

Publication Date: Feb -08

📋 Highlights
  • 2026 Same-Store Revenue Growth Guidance:: 1.5%-3% growth driven by declining new supply and steady job growth, with midpoint aligned to 2025's back-half demand trends.
  • Strong Portfolio Occupancy:: Maintained over 96% occupancy in 2025, with expectations to sustain this in 2026 despite a 0.5% blended rate growth due to 4.5% renewal rates offsetting new lease declines.
  • Capital Returns to Shareholders:: Returned $1.3B in 2025 via dividends and buybacks, including $300M in stock repurchases, with $500M net sales proceeds offset by share repurchase benefits in 2026.
  • Norm FFO Per Share Outlook:: Expected to rise 2.25% to $4.08 in 2026, driven by $0.06 from lease-ups and $0.01 from non-same-store NOI, despite $0.06 drag from asset sales and $0.05 interest expense headwind.
  • Debt and Credit Profile:: Closed 2025 with 4.3x net debt to normalized EBITDAre and received S&P's positive outlook, targeting $500M–$1B debt issuance for refinancing and capital flexibility in 2026.

Financial Performance

The company's financial performance was marked by a blended rate of 0.5% in the quarter, driven by a strong achieved renewal rate of 4.5% offset by negative new lease rates. For 2026, the company expects same-store revenue growth to be between 1.5% and 3%, driven by a decline in new supply and steady job growth. Analysts estimate next year's revenue growth at 3.4%, indicating a slight increase in growth rate.

Valuation Metrics

Equity Residential's current valuation metrics indicate a P/E Ratio of 21.5, a P/B Ratio of 2.24, and a Dividend Yield of 4.34%. The company's Net Debt to EBITDAre ratio is 4.3x, indicating a manageable level of debt. The EV/EBITDA ratio is 15.79, suggesting a reasonable valuation.

Guidance and Outlook

The company expects norm FFO per share of $4.08 in 2026, a 2.25% improvement over 2025. The company's guidance assumes steady demand similar to the back half of 2025. The company also expects same-store expense growth to range between 3% to 4% in 2026, with a midpoint that is 20 basis points lower than 2025.

Capital Allocation

The company returned over $1.3 billion to shareholders in 2025 through dividend payments and stock repurchases. The company expects to continue this trend in 2026, with a focus on investing in share repurchases. The company's flexible approach to transactions is expected to continue, with a focus on selling non-core assets to improve the growth rate of its existing portfolio.

Market Trends

The company sees strength in San Francisco and New York, with rents expected to rise in these markets. The company's portfolio is currently 1.2% above lease, but this is expected to change as rents continue to rise. The company is cautious about accelerating capital deployment in the Sunbelt markets, citing its cost of capital and the relative attractiveness of share buybacks.

3. NewsRoom

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Equity Residential Q4 Earnings Call Highlights

Feb -08

Source: defenseworld.net

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Equity Residential (EQR) Q4 2025 Earnings Call Highlights: Strong Occupancy and Strategic Buybacks Amid Market Challenges

Feb -06

Source: gurufocus.com

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Equity Residential (EQR) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

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Equity Residential Q4 FFO & Revenues Miss Estimates but Increase Y/Y

Feb -06

Source: zacks.com

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Here's What Key Metrics Tell Us About Equity Residential (EQR) Q4 Earnings

Feb -06

Source: zacks.com

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Equity Residential (EQR) Q4 FFO and Revenues Miss Estimates

Feb -05

Source: zacks.com

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Equity Residential Reports Fourth Quarter 2025 Results

Feb -05

Source: businesswire.com

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Curious about Equity Residential (EQR) Q4 Performance? Explore Wall Street Estimates for Key Metrics

Feb -04

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Acquisition, Development and Management of Multifamily Residential Properties

Expected Growth: 4.5%

Equity Residential’s strategic focus on high-quality apartment properties in urban and high-growth markets, drives growth. Proximity to employment centers, public transportation, and amenities fuels demand, supporting a strong outlook.

7. Detailed Products

Apartments for Rent

Equity Residential offers a wide range of apartments for rent, from studios to three-bedroom apartments, in various locations across the United States.

Luxury Apartments

Equity Residential's luxury apartments offer high-end amenities, modern designs, and premium finishes, providing an upscale living experience.

Student Housing

Equity Residential provides student housing options near top universities, offering a convenient and comfortable living environment for students.

Senior Living Communities

Equity Residential's senior living communities offer a supportive and engaging environment for seniors, with amenities and services tailored to their needs.

Corporate Housing

Equity Residential provides corporate housing solutions for businesses, offering furnished apartments and amenities tailored to the needs of business travelers and relocating employees.

8. Equity Residential's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Equity Residential is medium, as there are alternative options for renters, such as single-family homes and other apartment complexes.

Bargaining Power Of Customers

The bargaining power of customers for Equity Residential is low, as individual renters have limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Equity Residential is low, as the company has multiple suppliers for goods and services.

Threat Of New Entrants

The threat of new entrants for Equity Residential is medium, as there are barriers to entry, such as high capital requirements, but new companies can still enter the market.

Intensity Of Rivalry

The intensity of rivalry for Equity Residential is high, as there are many established competitors in the apartment rental market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.00%
Debt Cost 3.95%
Equity Weight 60.00%
Equity Cost 8.11%
WACC 6.45%
Leverage 66.67%

11. Quality Control: Equity Residential passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.89$

Current Price

63.89$

Potential

-0.00%

Expected Cash-Flows