Equity Residential (EQR): Is the Real Value Higher Than Recent Share Price Suggests?

Equity Residential (EQR) shares have seen some price swings recently. This creates an interesting backdrop for investors keeping an eye on the real estate sector. A closer look at recent performance trends offers a few points to consider.

See our latest analysis for Equity Residential.

Despite some choppy trading lately, Equity Residential’s share price remains under pressure following a 4.77% decline over the past week and a year-to-date drop of 13.93%. While long-term investors have still enjoyed a 39.96% total shareholder return over five years, recent momentum has been fading as changing market conditions weigh on the stock.

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Given the recent declines and a notable discount to many analysts’ targets, is Equity Residential trading below its true value, or is the current price already accounting for its future earnings potential?

Most Popular Narrative: 17.8% Undervalued

Compared to its last close price of $60.31, the most-followed narrative places Equity Residential's fair value at $73.35. This fair value estimate is substantially higher, drawing attention to how current market pressures may be overshadowing fundamental catalysts.

A significant reduction in new multifamily supply, especially in high-barrier coastal markets like New York, San Francisco, and Washington, D.C., is expected to increase pricing power for Equity Residential over the next 12 to 24 months. This would support stronger revenue and net operating income growth. High housing costs and limited single-family home availability are driving a shift toward long-term renting among well-compensated Millennials and Gen Z. This trend is sustaining robust occupancy rates and minimizing rent concessions, which underpins stable or growing cash flow.

Read the complete narrative.

Want to know which bold financial assumptions power that valuation? The narrative leans into profit margins and a revenue outlook not seen since pre-pandemic cycles. Curious what stress-tested forecasts make the math work? Dig in to see which numbers underpin the bullish case for this REIT’s recovery.

Result: Fair Value of $73.35 (UNDERVALUED)

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

However, persistent weakness in job growth or rising new supply in coastal markets could threaten rental demand and compress margins for Equity Residential.

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

Build Your Own Equity Residential Narrative

If you see the story differently or want to dive deeper yourself, you can pull up the same data and build a fresh narrative in just a few minutes. Do it your way

A great starting point for your Equity Residential research is our analysis highlighting 4 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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