Why Equity Residential (NYSE: EQR) stock is under pressure

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Equity Residential (NYSE: EQR) stock rose fell over 0.4% after the company posted mixed result for the fourth quarter of FY 19 on January 29th, 2020 (as of 12:44 pm GMT-5; Source: Google finance)

EQR in the fourth quarter of FY 19 has reported the adjusted funds from operations per share of 91 cents, beating the analysts’ estimates for the adjusted funds from operations per share of 89 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 4.8 percent to $683.92 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 0.16%.

Meanwhile, during the quarter, the Company’s operating partnership had signed a $2.5 billion multi-currency revolving credit facility, replacing its existing $2.0 billion credit agreement. The new facility matures on November 1, 2024, and can be extended or increased, which is subject to lender consent and customary conditions. Further, the operating partnership has increased the maximum size for its unsecured commercial paper note program from $500 million to $1 billion. The company during the quarter had redeemed $600 million in 4.75% unsecured notes originally due to mature on July 15, 2020.

Additionally, the company intends to declare a common share dividend of $0.6025 per share for the first quarter of 2020, which represents an annualized increase of approximately 6.2% over the 2019 dividend.

For the first quarter of 2020, the company expects EPS to be in the range of $0.98 to $1.02, FFO per share is expected to be in the range of $0.83 to $0.87 and Normalized FFO per share is expected to be in the range of $0.84 to $0.88.

In addition, the company will deploy installation of smart home technology in an additional 10,000 apartment units at a cost of about $1,000 per unit. The Company projects to receive a rent premium of approximately $30 per month per apartment unit. The company intends to fully deploy an AI-enabled sales tool, self-guided tours and a new mobile customer relationship management platform, which will result in efficiencies across the sales function.

For the fiscal year 2020, the company expects EPS to be in the range of $2.64 to $2.74, FFO per share is expected to be in the range of $3.57 to $3.67 and Normalized FFO per share is expected to be in the range of $3.59 to $3.69.

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