Equity Residential (EQR): Assessing Undervaluation After Recent Share Price Decline

Equity Residential (EQR) shares have moved lower recently, with the stock slipping nearly 5% over the past month. Investors are paying close attention to underlying fundamentals and current market sentiment as they weigh their next steps.

See our latest analysis for Equity Residential.

While the past month’s 5.5% drop in Equity Residential’s share price has caught investors’ attention, it reflects a broader loss of momentum for the stock in 2024, with a year-to-date share price return of -15.9%. Over the past year, total shareholder return is down 17%, which contrasts with the solid gains seen over the last three and five years. This suggests that the market’s attitude toward the company has shifted.

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With shares trading around 35% below estimated intrinsic value and 20% below analyst price targets, investors may wonder if Equity Residential’s slump is an opening for value seekers or if concerns about the potential for meaningful growth are justified.

Most Popular Narrative: 17.6% Undervalued

The most widely followed narrative places Equity Residential’s fair value at $71.53, notably above the recent closing price of $58.94. This creates a strong contrast with current market pessimism and raises questions about drivers behind the higher valuation.

The company’s focused portfolio in urban, supply-constrained markets positions it to disproportionately benefit from continued demographic migration into cities, delayed household formation, and preference for premium rental properties, which should drive above-market rent growth and higher long-term earnings.

Read the complete narrative.

Curious why this fair value bucks the recent downward trend? The narrative’s outlook hinges on exclusive market dynamics and some bold projections for urban demand and future profitability. There is more beneath the surface. See for yourself the critical assumptions making this story possible.

Result: Fair Value of $71.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent soft job growth or elevated new apartment supply in key markets could dampen rental demand and put pressure on Equity Residential’s expected revenue gains.

Find out about the key risks to this Equity Residential narrative.

Build Your Own Equity Residential Narrative

If you think there’s more to the story or would rather dig into the data yourself, you can shape a personal view in just a few minutes. Do it your way

A great starting point for your Equity Residential research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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