REIT - Residential · NYSE
Current Price
$65.43
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Equity Residential with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract high quality long-term renters. Equity Residential owns or has investments in 305 properties consisting of 78,568 apartment units, located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver.
ROIC (TTM)
181.0%
ROE (TTM)
8.7%
FCF Yield
5.26%
Based on trailing twelve-month data, EQR shows a free cash flow per share of N/A and a ROIC of 181.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.26% are important context metrics when evaluating EQR's stock valuation relative to peers.
The intrinsic value of EQR depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether EQR is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $65.43. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Equity Residential: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on REIT - Residential industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EQR's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Equity Residential, this means projecting how much free cash flow the REIT - Residential will produce over the next 5-10 years, then discounting those amounts to today's dollars. EQR's ROIC of 181.0% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EQR, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
