We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Equity Residential's (EQR) Q1 Earnings?
Read MoreHide Full Article
Equity Residential (EQR - Free Report) is slated to report first-quarter 2020 results on May 5, after market close. The company’s quarterly performance is likely to reflect growth in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Chicago, IL-based residential real estate investment trust (REIT) posted a positive surprise of 2.25% in terms of FFO per share. Results reflected improved same-store net operating income (NOI) and growth in average rental rate.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 2.02%. The graph below depicts this surprise history:
Let’s see how things are shaping up for Equity Residential prior to this announcement.
Factors at Play
Equity Residential is likely to have benefited from its initiatives to reposition the company’s portfolio in high barrier-to-entry/core markets. Moreover, though the coronavirus pandemic jeopardized the second half of the first quarter, the beginning of the period commenced on a positive note with a resilient economy and decent job-market strength. Therefore, the impact of the pandemic is likely to be more pronounced on real estate fundamentals in the second quarter than in the first.
In fact, per a report from real estate technology and analytics firm RealPage, Inc. (RP), the U.S. apartment rental market’s performance in February was steady with national apartment occupancy in the month remaining at 95.5%, matching that of January and up 30 basis points (bps) from the year-ago tally. Rent growth of 2.9% also matched the three-year average.
The company is anticipated to have witnessed healthy demand for its properties amid a solid job market and household formation. It is also likely to have gained from high home-ownership costs in several markets, which hinder transition from renter to homeowner.
Usually, demand for apartments slows down during the colder months as renters usually prefer less to move in winters. Nevertheless, Equity Residential noted that its same-store portfolio remains well occupied at 96.5% as of Mar 24, 2020. The company is also seeing indications of increased retention.
Further, the company announced that it has collected about 93% of its April cash rents through Apr 7, and is having talks with the remainder of the residents on payment options.
However, due to the several restrictions imposed by the government, the company has been witnessing reduced foot traffic and applications. The company has also been witnessing high new supply across a number of its markets. This elevated supply level will likely keep straining lease rates, occupancy as well as retention, and impede revenue growth.
For the first quarter, Equity Residential projects normalized FFO per share at 84-88 cents.The Zacks Consensus Estimate for the same is currently pegged at 87 cents, indicating a 6.1% year-over-year improvement, backed by solid revenues. The Zacks Consensus Estimate for the company’s quarterly revenues is pinned at $683.7 million, suggesting 3.2% growth year on year.
However, Equity Residential’s activities during the January-March period were inadequate to gain analyst confidence. Consequently, the Zacks Consensus Estimate for the quarter’s FFO per share remained unchanged over the past 30 days.
Here is what our quantitative model predicts:
Our proven model predicts a beat in terms of FFO per share for Equity Residential this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of a beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Equity Residential currently carries a Zacks Rank of 3 and has an Earnings ESP of +1.26%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these too have the right combination of elements to report a positive surprise this quarter:
CoreSite Realty Corporation (COR - Free Report) , slated to release first-quarter earnings on Apr 30, has an Earnings ESP of +3.19% and carries a Zacks Rank of 3 at present.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results around May 7, has an Earnings ESP of +9.74% and currently holds a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
What's in Store for Equity Residential's (EQR) Q1 Earnings?
Equity Residential (EQR - Free Report) is slated to report first-quarter 2020 results on May 5, after market close. The company’s quarterly performance is likely to reflect growth in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Chicago, IL-based residential real estate investment trust (REIT) posted a positive surprise of 2.25% in terms of FFO per share. Results reflected improved same-store net operating income (NOI) and growth in average rental rate.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 2.02%. The graph below depicts this surprise history:
Equity Residential Price and EPS Surprise
Equity Residential price-eps-surprise | Equity Residential Quote
Let’s see how things are shaping up for Equity Residential prior to this announcement.
Factors at Play
Equity Residential is likely to have benefited from its initiatives to reposition the company’s portfolio in high barrier-to-entry/core markets. Moreover, though the coronavirus pandemic jeopardized the second half of the first quarter, the beginning of the period commenced on a positive note with a resilient economy and decent job-market strength. Therefore, the impact of the pandemic is likely to be more pronounced on real estate fundamentals in the second quarter than in the first.
In fact, per a report from real estate technology and analytics firm RealPage, Inc. (RP), the U.S. apartment rental market’s performance in February was steady with national apartment occupancy in the month remaining at 95.5%, matching that of January and up 30 basis points (bps) from the year-ago tally. Rent growth of 2.9% also matched the three-year average.
The company is anticipated to have witnessed healthy demand for its properties amid a solid job market and household formation. It is also likely to have gained from high home-ownership costs in several markets, which hinder transition from renter to homeowner.
Usually, demand for apartments slows down during the colder months as renters usually prefer less to move in winters. Nevertheless, Equity Residential noted that its same-store portfolio remains well occupied at 96.5% as of Mar 24, 2020. The company is also seeing indications of increased retention.
Further, the company announced that it has collected about 93% of its April cash rents through Apr 7, and is having talks with the remainder of the residents on payment options.
However, due to the several restrictions imposed by the government, the company has been witnessing reduced foot traffic and applications. The company has also been witnessing high new supply across a number of its markets. This elevated supply level will likely keep straining lease rates, occupancy as well as retention, and impede revenue growth.
For the first quarter, Equity Residential projects normalized FFO per share at 84-88 cents.The Zacks Consensus Estimate for the same is currently pegged at 87 cents, indicating a 6.1% year-over-year improvement, backed by solid revenues. The Zacks Consensus Estimate for the company’s quarterly revenues is pinned at $683.7 million, suggesting 3.2% growth year on year.
However, Equity Residential’s activities during the January-March period were inadequate to gain analyst confidence. Consequently, the Zacks Consensus Estimate for the quarter’s FFO per share remained unchanged over the past 30 days.
Here is what our quantitative model predicts:
Our proven model predicts a beat in terms of FFO per share for Equity Residential this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of a beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Equity Residential currently carries a Zacks Rank of 3 and has an Earnings ESP of +1.26%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these too have the right combination of elements to report a positive surprise this quarter:
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on May 5, has an Earnings ESP of +0.67% and carries a Zacks Rank of 3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
CoreSite Realty Corporation (COR - Free Report) , slated to release first-quarter earnings on Apr 30, has an Earnings ESP of +3.19% and carries a Zacks Rank of 3 at present.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results around May 7, has an Earnings ESP of +9.74% and currently holds a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>