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Equity Residential (EQR) Down 7.1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Equity Residential (EQR - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equity Residential due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Equity Residential Q4 FFO and Revenues Beat Estimates
Equity Residential fourth-quarter 2021 normalized FFO per share of 82 cents outpaced the Zacks Consensus Estimate of 80 cents. Rental income of $645.1 million also exceeded the consensus mark of $628.6 million.
On a year-over-year basis, normalized FFO per share improved 7.9% while rental income rose 5.2%.
Results highlighted a strong physical occupancy, a substantial improvement in pricing power and an increase in non-Residential revenues.
In the fourth quarter, Equity Residential collected roughly 97% of its expected residential revenues. Further, the company received governmental rental assistance payments of $16.3 million paid on behalf of residents.
Quarter in Detail
Residential same-store revenues (includes 74,298 apartment units) were up 4.3% year over year to $587.5 million while expenses flared up 1.8% to $192.4 million. As a result, same-store NOI improved 5.6% to $395.2 million year over year.
The average rental rate increased 1.6% year over year to $2,729 during the fourth quarter, while physical occupancy expanded 240 basis points to 96.6% for the same-store portfolio.
Equity Residential acquired six operating properties, for a total purchase price of $689 million.
The company sold four operating properties in California and Washington for $695 million.
Balance Sheet
Equity Residential exited 2021 with cash and cash equivalents of $123.8 million, up from $42.6 million recorded at the end of 2020.
Outlook
For 2022, management projects normalized FFO per share of $3.40-$3.50.
Equity Residential’s full-year outlook incorporates a same-store revenue rise of 8-10%, an expense rise of 2.5-3.5% and a NOI improvement of 11-13%. Physical occupancy is expected to be 96.5%.
For first-quarter 2022, Equity Residential projects a normalized FFO per share of 76-80 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Equity Residential has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Equity Residential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Equity Residential (EQR) Down 7.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Equity Residential (EQR - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equity Residential due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Equity Residential Q4 FFO and Revenues Beat Estimates
Equity Residential fourth-quarter 2021 normalized FFO per share of 82 cents outpaced the Zacks Consensus Estimate of 80 cents. Rental income of $645.1 million also exceeded the consensus mark of $628.6 million.
On a year-over-year basis, normalized FFO per share improved 7.9% while rental income rose 5.2%.
Results highlighted a strong physical occupancy, a substantial improvement in pricing power and an increase in non-Residential revenues.
In the fourth quarter, Equity Residential collected roughly 97% of its expected residential revenues. Further, the company received governmental rental assistance payments of $16.3 million paid on behalf of residents.
Quarter in Detail
Residential same-store revenues (includes 74,298 apartment units) were up 4.3% year over year to $587.5 million while expenses flared up 1.8% to $192.4 million. As a result, same-store NOI improved 5.6% to $395.2 million year over year.
The average rental rate increased 1.6% year over year to $2,729 during the fourth quarter, while physical occupancy expanded 240 basis points to 96.6% for the same-store portfolio.
Equity Residential acquired six operating properties, for a total purchase price of $689 million.
The company sold four operating properties in California and Washington for $695 million.
Balance Sheet
Equity Residential exited 2021 with cash and cash equivalents of $123.8 million, up from $42.6 million recorded at the end of 2020.
Outlook
For 2022, management projects normalized FFO per share of $3.40-$3.50.
Equity Residential’s full-year outlook incorporates a same-store revenue rise of 8-10%, an expense rise of 2.5-3.5% and a NOI improvement of 11-13%. Physical occupancy is expected to be 96.5%.
For first-quarter 2022, Equity Residential projects a normalized FFO per share of 76-80 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Equity Residential has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Equity Residential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.