EQR
Equity Residential
$69.00
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 19.2% below fair value
You pay
$69.00
Bear
$72.04
Fair
$85.41
Bull
$98.78
Bear
$72.04
+4.4%
$5.69 FFO × 16x
Fair
$85.41
+23.8%
$5.69 FFO × 19x
Bull
$98.78
+43.2%
$5.69 FFO × 22x
Key Value Driver
FFO/share ($5.69) × residential P/FFO multiple
Implied Market Multiple
12.1x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $71.00 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $85.41 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend-based valuation: $52.83 (42% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $71.00 (from 46 analysts). Our estimate is 29% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify