It has been about a month since the last earnings report for Equity Residential (EQR). Shares have added about 4.5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Equity Residential due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Equity Residential before we dive into how investors and analysts have reacted as of late.
Equity Residential Q3 FFO Meets Estimates, Rental Income Rises Y/Y
Equity Residential reported a third-quarter 2025 normalized FFO per share of $1.02, which met the Zacks Consensus Estimate. The figure improved 4.1% from the year-ago quarter.
Results reflected a rise in same-store revenues and physical occupancy on a year-over-year basis. The company revised its guidance for 2025 normalized FFO per share.
Rental income of $782.4 million outpaced the consensus mark of $781.4 million. Rental income was up 4.6% year over year.
Quarter in Detail
Same-store revenues were up 3% year over year, above our estimate of 1.9%. Same-store expenses flared up 3.6% year over year versus our estimate of 2.2%. Consequently, same-store NOI climbed 2.8% year over year, above our estimate of 1.7%.
The average rental rate increased 2.7% year over year to $3,218 in the quarter ended in September. Meanwhile, the same-store portfolio physical occupancy improved by 20 basis points (bps) year over year at 96.3%. Our estimate for the metric was 96.4%.
Same-store residential revenues were up 3% year over year, while expenses increased 3.4%. Same-store residential NOI expanded 2.7% year over year.
The new lease change for its residential same-store properties was down 1.0%, while the renewal rate achieved by Equity Residential was 4.5% for the third quarter. The blended rate for the quarter was 2.2%. The physical occupancy for this portfolio was 96.3%, improved 30 bps sequentially.
Portfolio Activity
In the third quarter of 2025, Equity Residential acquired a 375-unit property located in Arlington, TX, for nearly $103 million. Moreover, the company sold two properties, one in suburban Boston and one in Arlington, VA, for an aggregate sale price of around $247.9 million.
Balance Sheet
Equity Residential exited the third quarter of 2025 with cash and cash equivalents of $93.1 million, up from $31.3 million recorded as of June 30, 2025.
The net debt to normalized EBITDAre was 4.41X, which decreased from 4.45X in the previous quarter. The unencumbered NOI as a percentage of the total NOI was 90.4% in the quarter, remaining unchanged from the prior quarter.
During the third quarter of 2025 and following this period, Equity Residential repurchased and retired around 1.5 million of its common shares for a total value of $99.1 million.
2025 Guidance Raised
For the fourth quarter of 2025, the company projects normalized FFO per share in the band of $1.02 to $1.06.
For 2025, Equity Residential revised its normalized FFO per share in the band of $3.98-$4.02, compared to the $3.97-$4.03 range guided earlier.
The company’s full-year guidance incorporates projections for same-store revenue growth of 2.5-3.0%, an expense increase of 3.5-4.0%, and an NOI expansion of 2.1-2.6%. Physical occupancy is expected at 96.4%.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Equity Residential has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Equity Residential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Equity Residential (EQR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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