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Equity Residential EQR

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Despite Lower-Than-Anticipated Q1 Results, Equity Residential Improves 2021 Guidance

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

No-moat Equity Residential's first-quarter results were slightly disappointing, but we didn't see anything that would materially affect our $71 fair value estimate. Same-store occupancy sequentially improved for the first time in a year, rising 80 basis points to 95.0%, which is in line with our expectations. However, rental rates continued to deteriorate, with a decline of 9.3% year over year slightly worse than our estimate of a 7.7% drop. Same-store operating expenses rose 3.9% compared with our estimate of 3.5%, with repair, maintenance, insurance, and advertising expenditures all rising by double figures. As a result, same-store net operating income fell 17.1% year over year in the first quarter, slightly worse than our estimate of 15.6%. Normalized funds from operations for the first quarter was $0.68, $0.03 below our estimate and $0.08 below the figure Equity Residential reported in the fourth quarter of 2020.

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Company Profile

Business Description

Equity Residential owns a portfolio of 304 apartment communities with around 78,000 units and is developing three additional properties with 825 units. The company focuses on owning large, high-quality properties in the urban and suburban submarkets of Southern California, San Francisco, Washington, D.C., New York, Seattle, and Boston.

Two North Riverside Plaza, Suite 400
Chicago, IL, 60606
T +1 312 474-1300
Sector Real Estate
Industry REIT - Residential
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 2,600