Equity Residential: Earnings Scorecard – Analyst Blog

Filed in earnings, Gold Investing, Gold Prices, lead, recession, shares, ubs by on May 26, 2010 0 Comments

Equity Residential ( EQR ), a leading real estate investment trust (REIT), reported fiscal 2010 first quarter FFO (funds from operations) of $0.49 per share, which missed the Zacks Consensus Estimate by a penny. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. Below we will cover the results of the recent earnings announcement, subsequent analyst estimate revisions and Zacks ratings for the short-term and long-term outlook for the stock. Earnings Report Review During first quarter 2010, total revenues of the company were $488.7 million, compared to $483.1 million in the year-ago period. Same-store quarterly revenues decreased 2.9%, while same-store operating expenses increased 1.5%. Same-store net operating income (NOI) during the quarter decreased 5.6% year-over-year primarily due to a 3.9% decrease in average rental rates. (Read our full coverage on this earnings report: Equity Residential FFO Dips ) Earnings Estimate Revisions – Overview Estimates have moved up for Equity Residential since the earnings release, meaning that analysts were generally optimistic by this information. Let’s dig into the earnings estimate details. Agreement of Analysts In the past 7 days, both fiscal 2010 and fiscal 2011 estimates have been increased by 2 analysts. Analysts, in general, are in consensus about the future outlook for Equity Residential’s earnings, as is visible below. Eighteen analysts have raised their estimates for fiscal 2010, while none have lowered them. For fiscal 2011, 17 analysts have raised their earnings estimates and none have lowered. This is a positive showing. Magnitude of Estimate Revisions Earnings estimates increased by 9 cents for fiscal 2010 from $2.03 to $2.12 since the earnings announcement. For fiscal 2011, earnings estimates have moved up 14 cents from $2.12 to $2.26. This is encouraging news for the company. Equity Residential in Neutral Lane Equity Residential is the largest publicly traded multi-family real estate operator in the U.S., with a diverse portfolio of properties in some of the best long-term apartment markets in the country. Furthermore, the company has a fully implemented state-of-the-art operating platform that enables it to manage the operations on a real-time basis and deliver a market-leading performance. Equity Residential is repositioning its portfolio to focus on markets that have better job and rent growth prospects. In addition, the company has a relatively strong balance sheet and adequate liquidity. However, continued job losses due to the prolonged recession may weigh on the company’s top and bottom-lines. Currently, Equity Residential shares are maintaining a Zacks #2 Rank, which translates to a short-term Buy recommendation. However, our long-term recommendation for the stock remains cautious at Neutral. We remain bullish about one of its peers, Post Properties Inc. ( PPS ), which maintains a Zacks #1 Rank (Strong Buy). Our long-term recommendation for Post Properties is also strong at Outperform as we anticipate the stock to perform well above the broader market. About Earnings Estimate Scorecard  Len Zacks, PhD in mathematics from MIT, proved over 30 years ago that earnings estimate revisions are the most powerful force impacting stock prices. He turned this ground breaking discovery …

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Equity Residential: Earnings Scorecard – Analyst Blog

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