EQUITY RESIDENTIAL (EQR): what the price requires
The current priced-in claim for EQUITY RESIDENTIAL (EQR) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EQR
Headline
| Field | Value |
|---|---|
| Ticker | EQR |
| Company | EQUITY RESIDENTIAL |
| Current price | $69.55/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 12.2x |
| FFO yield | 8.2% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 9.2% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.58σ |
| cohort percentile (of 88 peers) | 25 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.62x | 4 | expensive |
| Earnings | 1.51x | 4 | expensive |
| Relative | 1.12x | 6 | expensive |
| Growth | 1.03x | 5 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $73.82 | 0.94x | yes | FCF base $1.6B, growth 3% (input: historical growth), terminal g 3.4%, WACC 8.5%, 5yr projection |
| DCF Exit Multiple | Growth | $67.37 | 1.03x | yes | Exit EV/EBITDA: 27.8x / 29.8x / 31.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $99.08 | 0.70x | yes | P/E 26.03x (blended: static sector reference 35x + trailing (TTM) 13x), scenarios: 21.8x / 26.0x / 30.2x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $944.45 | 0.07x | yes | DPS $2.72, g=8.9% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $57.07 | 1.22x | yes | Stage 1: 7% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $26.77 | 2.60x | yes | BV/sh $27.71, ROE (TTM) 8.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $26.31 | 2.64x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $46.31 | 1.50x | yes | Rev $3.1B, growth 3% (input: historical growth; tapered), Terminal P/S: 6.7x / 8.0x / 9.3x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $66.36 | 1.05x | yes | FFO/share $5.53, growth 7% (input: historical FFO/share growth, 10y median), PEG=3.98 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $10.36 | 6.71x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.76B × (1−21%) / WACC 8.5% → EPV (no growth) |
| Residual Income | Asset | $26.24 | 2.65x | yes | BV $27.71 + 5yr PV of (ROE (TTM) 8.9% − Kₑ 9.3%) × BV; BV grows 5.8%/yr |
| Graham Number | Asset | $58.72 | 1.18x | yes | √(22.5 × FFO/share $5.53 × BVPS $27.71) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $44.06 | 1.58x | yes | EBITDA $1.00B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $37.65 | 1.85x | yes | FCF $1623.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $104.88 | 0.66x | yes | FFO/share $5.53 × (8.5 + 2×7.1%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $48.50 | 1.43x | yes | Revenue $3.11B × sector P/S 6.0x |
| PEG Fair Value | Relative | $58.60 | 1.19x | yes | FFO/share $5.53 × (PEG 1.5 × growth 7.1% (input: historical FFO/share growth, 10y median)) → PE 10.6x |
| Earnings Yield | Earnings | $59.78 | 1.16x | yes | FFO/share $5.53 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $78.38 | 0.89x | yes | FFO/share $5.53 × 14.2x P/FFO (route cohort median, n=85); FFO $2.13B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 385M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Funds from operations (trailing) | $2.1b |
| Share count CAGR (buyback) | -0.3% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- Equity Residential owns a coastal-concentrated apartment portfolio in supply-constrained markets like "San Francisco and Seattle" plus targeted Sunbelt presence, running 96.5% physical occupancy and a record-low 7.8% turnover that makes its cash flow unusually predictable.
- The biggest specific risk is margin compression from new-supply pressure in Sunbelt expansion markets and rent-regulation risk in its coastal core, with same-store expenses up 3.7% against just 2.2% revenue growth in the latest quarter.
- What to watch next is the same-store NOI trajectory against full-year guidance of 0.5% to 2.5%, plus the pace of buybacks after $219.4 million of repurchases in the first quarter.
Bull Case
Watch how Equity Residential spends its cash and the discipline is the tell. The company repurchased 3.5 million shares for $219.4 million in the first quarter and raised the annual dividend to $2.81, a 1.4% increase. Buying back stock is the unusual move for an apartment REIT: it is management saying its own shares are a better use of capital than the next building, a judgment that the public price sits below the private value of the portfolio. The share count is essentially flat to slightly lower as a result, which means the per-share cash flow grows even when the portfolio itself is steady. For a landlord, choosing buybacks over expansion at this point in the cycle is a statement about where value lies.
The portfolio underneath is built for durability through location. Equity Residential concentrates in dense, supply-constrained coastal markets, the filing names "San Diego), San Francisco and Seattle, diversified by a targeted presence in Denver, Atlanta, Dallas/Ft. Worth and Austin." The coastal core is hard to add new supply to, which protects pricing power, while the targeted Sunbelt presence adds growth optionality. The operating metrics show the model working: physical occupancy reached 96.5% on same-store residential properties, and resident turnover fell to a record-low 7.8% in the quarter. Renters who do not leave are renters the company does not have to re-lease at a discount or spend to replace.
The cash flow is steady and the balance sheet is strong enough to make the capital return sustainable. Normalized funds from operations grew 4.2% to $0.99 per share, and management maintained full-year guidance of $4.02 to $4.14. Same-store net operating income rose 1.4% on 2.2% revenue growth. Fixed-charge coverage sits at a comfortable 7.8 times, so the dividend and the buyback are funded from a position of strength, not strain. At roughly 12 times adjusted funds from operations, an AFFO yield near 8.5%, the units offer a high-occupancy, low-turnover apartment portfolio in markets where supply is genuinely scarce, run by a management team returning cash rather than empire-building.
Bear Case
The pricing power that defines an apartment landlord is being chipped at from two directions, and the latest quarter shows the erosion in the numbers. Same-store revenue grew 2.2%, but operating expenses rose 3.7%, so net operating income advanced only 1.4%. That spread is the warning: when costs grow faster than rents, the margin compresses even with the buildings nearly full. The expansion markets are the source of the rent pressure. Equity Residential's targeted Sunbelt presence in Dallas, Austin, and Atlanta sits in exactly the metros that have absorbed the heaviest wave of new apartment construction, and abundant new supply caps what an existing landlord can charge. Management's own full-year guidance reflects it, with new-lease rate change expected roughly flat for the year. A landlord that cannot push new-lease rents is relying on renewals and occupancy to carry growth, and there is a ceiling on both.
Regulation is the second erosion, and the company flags it directly. The 10-K notes that "in part due to increasing pressure from advocacy groups, a growing number of state and local governments (including at times the federal government) have enacted and may continue to consider enacting" measures, the language of rent control and tenant-protection rules. Equity Residential's coastal concentration, the dense, supply-constrained markets that give it pricing power, are the same jurisdictions most inclined to cap rent increases. The moat and the regulatory risk live at the same address. A rent-control regime in a core market would convert the supply scarcity that protects pricing into a legal ceiling on it.
The valuation does not offer much cushion against slow growth. At roughly 12 times adjusted funds from operations, the price is supported by the peer-multiple and cash-flow-growth lenses but already prices in continued steady NOI growth; the asset-value lens, which marks the underlying real estate, reads expensive relative to the public quote on a depreciated basis. With same-store NOI guided to a 0.5% to 2.5% range for the year and blended rate growth of just 1.5% to 3%, this is a low-single-digit growth REIT, and the cost of equity the framework uses is about 9.3%. If expense inflation persists or a core market tightens rent regulation, the modest NOI growth that justifies the price slows further, and a yield-oriented shareholder base has little reason to pay up. The bear is not a collapse; it is that the durable, low-turnover portfolio may grow too slowly to outrun its own cost base and the regulatory tide.
Valuation
The price is paying for steady, not spectacular, growth. At roughly 12 times adjusted funds from operations, an AFFO yield near 8.5%, the units embed continued low-single-digit growth in that cash flow, which is consistent with management's full-year guidance for normalized FFO of $4.02 to $4.14 and same-store NOI growth in a 0.5% to 2.5% range. The price sits below the level that even a gentle decline in the cash stream would warrant, so the bar the business has to clear is modest: keep the buildings full and let renewals and occupancy carry mid-single-digit FFO progress.
The methods cluster in a way typical of a mature apartment REIT. The peer-multiple and cash-flow-growth lenses both land near the current price, the earnings-power lens slightly above it, while the asset-value lens prices the underlying real estate richer than the public quote on a depreciated-cost basis. That last point is the recurring quirk of valuing a property company on book: the buildings are carried below replacement value, so an asset-marked lens reads "expensive" against a public price that is actually undemanding on cash flow. The narrow spread across the cash-based methods is the real signal, this is a fairly priced, steady compounder rather than a stretched or deeply discounted one.
Solvency is the supportive leg, and it underwrites the capital-return policy. Fixed-charge coverage is a comfortable 7.8 times, and the share count is roughly flat after the first-quarter repurchase of 3.5 million shares for $219.4 million. The funds from operations base of about $2.1 billion comfortably covers the dividend, recently raised to $2.81 annually, with room left for buybacks. The decisive element for this name is not leverage, which is conservative, but the durability of the cash flow: physical occupancy of 96.5% and record-low 7.8% turnover are the metrics that make the FFO predictable, and as long as those hold, the price is paying a fair multiple for a dependable income stream in markets where new supply is hard to add.
Catalysts
The Q1 2026 print, reported in late April, was the central recent catalyst, and it beat on the metric that matters for a REIT. Normalized funds from operations reached $0.99 per share, up 4.2% year over year and ahead of consensus, while the company maintained full-year normalized FFO guidance of $4.02 to $4.14. Same-store net operating income grew 1.4% on 2.2% revenue growth against 3.7% expense growth, with physical occupancy at 96.5% and resident turnover at a record-low 7.8%. The operational story was resilience: full buildings and sticky tenants offsetting a softer rent-growth environment.
Capital return was the other headline. The board raised the annual dividend to $2.81, a 1.4% increase, and the company repurchased 3.5 million shares for $219.4 million in the quarter. Buying back stock signals management views the units as trading below the private value of the portfolio, a notable allocation choice at this point in the cycle.
Into the rest of 2026, the figures to watch are blended rate growth, guided to 1.5% to 3% with renewals expected around 4.5% to 4.75% and new-lease change roughly flat, and same-store revenue growth guided to a 1.2% to 3.2% range. The swing factor is whether the Sunbelt supply wave eases enough to let new-lease pricing recover, and whether expense growth moderates so that revenue gains flow through to NOI. Continued occupancy near 96% and the pace of further repurchases are the cleanest reads on whether the steady-compounder thesis holds.
Peer Cohorts (Per Segment, With Filing Citations)
Residential apartments (single reportable segment) (reported)
- AVB (AVALONBAY COMMUNITIES, INC.)
- (no filing in the citation store)
- ESS (ESSEX PROPERTY TRUST, INC.)
- (no filing in the citation store)
- ELS (EQUITY LIFESTYLE PROPERTIES, INC.)
- (no filing in the citation store)
- INVH (Invitation Homes Inc.)
- (no filing in the citation store)
- MAA (MID-AMERICA APARTMENT COMMUNITIES, INC.)
- (no filing in the citation store)
- UDR (UDR, Inc.)
- (no filing in the citation store)
- NXRT (NexPoint Residential Trust, Inc.)
- (no filing in the citation store)
- IRT (INDEPENDENCE REALTY TRUST, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release