Morgan Stanley analyst Adam Kramer maintained a Hold rating on Equity Residential (EQR – Research Report) today and set a price target of $72.50.
Adam Kramer has given his Hold rating due to a combination of factors related to Equity Residential’s current market position and future growth prospects. The company recently held an investor day, highlighting a strategic outlook similar to the post-GFC era, characterized by limited housing supply and strong multifamily demand driven by demographic trends. Management sees opportunities for growth with an underlevered balance sheet and a robust operational platform, but the growth is expected to be moderate.
In terms of financial projections, Equity Residential introduced a growth algorithm targeting 4-5% normalized FFO per share growth annually, assuming a stable operating environment. This growth is supported by above-trend SS-NOI and investment activities, although debt refinancing could dampen growth. The anticipated total return, including a 4% dividend yield, is around 9%, which suggests moderate upside potential. These factors contribute to the Hold rating, indicating that while there are positive elements, the stock may not outperform in the near term.
In another report released on February 21, Mizuho Securities also maintained a Hold rating on the stock with a $76.00 price target.
Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of EQR in relation to earlier this year.