EQR - Embedded Expectations Analysis - 2020 10 13
Equity Residential (EQR:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 35.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about occupancy rates, pricing pressures, and new residential opportunitiesSpecifically, management may lack confidence in their ability to secure new residential opportunities, repurpose vacant retail spaces, and continue stabilizing occupancy rates. Furthermore, they may have concerns about how active leasing season will be and their ability to maintain their urban and suburban portfolios. They may also lack confidence in their ability to sustain renewals and retention, improve New York's net operating income, and continue attracting high-income renters. Moreover, they may have concerns about pricing pressures, and they may be downplaying concerns about the performance of their apartment business and potential contract terminations. Finally, they may have concerns about an oversupply in the Peninsula South Bay and the pandemic's impact on their overall business, particularly the private market
Equity Residential is a real estate investment trust. The company focuses on the acquisition, development and management of rental apartment properties. The company is the general partner of, and owns an ownership interest in ERP Operating Limited Partnership (ERPOP). All of the company's property ownership, development and related business operations are conducted through ERPOP and those entities/subsidiaries owned or controlled by ERPOP (collectively, Operating Partnership). The Operating Partnership holds substantially all of the assets of the company The company, directly or indirectly through investments in title holding entities, owns all or a portion of its properties located in several states and the District of Columbia.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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