Argus Upgrades Equity Residential (EQR) to Buy

Argus analyst Jacob Kilstein upgraded Equity Residential (NYSE: EQR) from Hold to Buy with a price target of $72.00.

The analyst comments "We are raising our rating on Equity Residential (NYSE: EQR) to BUY from HOLD. EQR provides high-end rentals in large coastal cities, markets that were hit hard by the pandemic in 2020, when many residents fled to the suburbs. The company is now benefiting from high barriers to home ownership, including high mortgage rates and housing prices. The company has high occupancy rates, but relies on rental increases and low turnover to boost NOI. EQR benefits from steady demand from affluent renters who tend to accept rate increases and wish to postpone homeownership. The company has recently seen increased demand from renters under 30, who have been the quickest to return to urban areas. We have a favorable view of management’s expansion plans, which have in the past balanced acquisitions with sales of noncore properties. In the current economy, the company is focusing on dispositions and using the proceeds to pay down debt. It is also reducing the need for additional debt through the use of joint ventures. While EQR has historically focused on large properties in major coastal cities, it is also expanding in fast-growing inland markets such as Denver, Dallas, and Austin. With mortgage rates up, mortgage applications down, and the national home price index remaining close to its summer peak, we believe that oversold apartment REITs like EQR offer favorable opportunities for investors seeking total returns. Our new target price is $72."

For an analyst ratings summary and ratings history on Equity Residential click here. For more ratings news on Equity Residential click here.

Shares of Equity Residential closed at $61.55 yesterday.

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