Morgan Stanley Highlights Equity Residential (EQR)’s Emerging Strength

Equity Residential (NYSE:EQR) is among the 14 Most Profitable Real Estate Stocks Right Now. On March 26, Morgan Stanley upgraded Equity Residential (NYSE:EQR) from Equalweight to Overweight and lifted the price target to $74, up from $72. According to the firm, the company’s markets have shown greater resilience from a supply standpoint. Morgan Stanley anticipates an outperformance of urban assets relative to suburban ones, thus improving key performance indicators faster than coastal peers.

The company’s increased West Coast exposure compared to competitor AvalonBay Communities positions it well for sustained recovery in those markets, despite greater Los Angeles exposure limiting some upside, Morgan Stanley noted. Regarding its previous worry about dilution and negative market perception from continued Sun Belt acquisitions, Morgan Stanley indicated that cost-of-capital restrictions have likely put those acquisitions on hold.

Back on March 12, Argus trimmed the price target on Equity Residential (NYSE:EQR) to $70 from $74 and maintained a Buy rating. Marie Ferguson, an analyst at the firm, attributed the price adjustment to the broader market pullback. For the first half of this year, management expects proceeds from asset sales of approximately $200 million to be used in share repurchases.

Equity Residential (NYSE:EQR), incorporated in 1993, is a Maryland-based company that owns and operates 312 rental properties comprising 85,190 apartment units in dynamic metro areas.

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