EQR - Embedded Expectations Analysis - 2021 06 14
Equity Residential (EQR:USA) currently trades at a premium to UAFRS-based (Uniform) assets, with a 1.8x Uniform P/B. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about rent pricing, residential demand, and their markets' pace of recoverySpecifically, management may lack confidence in their ability to sustain improvements in occupancy rates, rent pricing, and renewal rates. In addition, they may have concerns about the pace of recovery of their major markets, their reliance on debt for capital funding, and their ability to pullback concessions. Furthermore, management may lack confidence in their ability to meet their adjusted operational cash flow guidance and offset the impact of recent revenue declines. Moreover, they may be overstating the potential residential demand near offices and colleges, the strength of their post-pandemic positioning, and the growth potential of their new assets, particularly in Denver. Additionally, management may be concerned about restrictive zoning laws and their overexposure to the New York 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.
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- 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
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