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May 17, 2022, 10:11 a.m. EDT

Equity Residential stock rallies after Mizuho turns bullish, citing valuation and 2 near-term catalysts

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By Tomi Kilgore

Shares of Equity Residential /zigman2/quotes/205190279/composite EQR -0.30% rose 0.9% in morning trading Tuesday, to outperform its real estate investment trust peers, after Mizuho analyst Haendel St. Juste turned bullish on the rental apartment REIT, citing an "intriguing risk/reward" following its recent underperformance. The gains come as the iShares Residential and Multisector Real Estate ETF /zigman2/quotes/210476670/composite REZ +1.47% edged up just 0.1%. St. Juste raised his rating on Equity Residential (EQR) to buy from neutral, saying EQR trades below its long-term valuation averages, and has a wider discount than its peers than historically. "Beyond valuation, we see two near-term catalysts that should benefit EQR -- accelerating demand and pricing (particularly in [New York City]) that should support further rent growth and potential re-acceleration, as well as an anticipated [fiscal 2022] guidance increase," St. Juste wrote in a note to clients. Meanwhile, he cut his stock price target to $84 from $92, given lower group multiples, but the new target still implies 12% upside from current levels. The stock has dropped 11.7% over the past three months, while the apartment and multisector REIT ETF has declined 6.1%, the SPDR Real Estate Select Sector ETF /zigman2/quotes/207325179/composite XLRE +2.17% has slipped 4.6% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +3.06% has dropped 7.4%.

/zigman2/quotes/205190279/composite
US : U.S.: NYSE
$ 71.82
-0.22 -0.30%
Volume: 3.07M
June 24, 2022 4:00p
P/E Ratio
20.09
Dividend Yield
3.48%
Market Cap
$28.26 billion
Rev. per Employee
$1.04M
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/zigman2/quotes/210476670/composite
US : U.S.: NYSE Arca
$ 80.27
+1.16 +1.47%
Volume: 62,952
June 24, 2022 4:10p
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/zigman2/quotes/207325179/composite
US : U.S.: NYSE Arca
$ 41.81
+0.89 +2.17%
Volume: 6.78M
June 24, 2022 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,911.74
+116.01 +3.06%
Volume: 3.46B
June 24, 2022 5:05p
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