Equity Residential Reports Mixed Q4 Results, Guides for Modest Growth in 2026
Equity Residential (NYSE:EQR), a leading apartment real estate investment trust (REIT), reported financial results for the fourth quarter and full year ended December 31, 2025. The company's performance presented a nuanced picture, with core funds from operations meeting expectations but revenue falling slightly short of analyst forecasts. Management's outlook for 2026 points to continued, albeit moderate, growth in a stabilizing rental market.
Fourth Quarter Performance vs. Estimates
The company's key profitability metric, Normalized Funds from Operations (NFFO) per share, came in at $1.03 for the quarter. This figure notably exceeded the analyst consensus estimate of $0.42. However, total revenue for the period was $781.9 million, which fell short of the estimated $796.0 million.
- Normalized FFO per share: $1.03 reported vs. $0.42 estimated – a significant beat.
- Total Revenue: $781.9 million reported vs. $796.0 million estimated – a slight miss.
This divergence highlights the complex nature of REIT earnings, where non-cash items, property transactions, and gains can significantly impact per-share results beyond the top-line revenue figure. For the full year 2025, the company reported same-store net operating income (NOI) growth of 2.2%, driven by a 2.6% increase in revenue, though expenses grew at a faster pace of 3.7%.
Market Reaction and Strategic Moves
Following the earnings release, the stock's after-market performance showed minimal immediate movement. This muted reaction suggests investors are digesting the mixed results against a backdrop of strategic capital recycling highlighted by the company. Throughout 2025, Equity Residential was a net seller of properties, disposing of 11 assets for approximately $1.1 billion while acquiring nine for about $636.8 million.
A significant portion of the disposition proceeds was directed toward share repurchases. The company bought back and retired approximately 4.8 million common shares in 2025 at a weighted average price of $62.03, totaling roughly $300 million. CEO Mark J. Parrell explicitly stated the company views its stock as "a bargain" at current levels, framing the buybacks as an attractive use of capital.
2026 Guidance and Analyst Expectations
Looking ahead, Equity Residential provided detailed guidance for 2026, projecting modest growth in a environment of declining new apartment supply. The company expects same-store revenue growth between 1.2% and 3.2%, with NOI growth forecast between 0.5% and 2.5%.
The company's per-share guidance for 2026 is as follows:
- Normalized FFO per share: $4.02 to $4.14 (midpoint of $4.08)
- EPS: $1.44 to $1.56 (midpoint of $1.50)
This NFFO guidance midpoint of $4.08 represents a 2.3% increase over the 2025 actual of $3.99. It is worth comparing this outlook to existing analyst expectations. The provided consensus estimates for full-year 2026 project revenue of approximately $3.24 billion and earnings per share of $1.45. The company's EPS guidance range brackets this analyst estimate, while its NFFO guidance provides the key operational metric watched by REIT investors.
For the first quarter of 2026, the company guided for Normalized FFO per share between $0.94 and $0.98, which aligns with the typical seasonal softening in the apartment sector.
Press Release Highlights
Beyond the headline numbers, the earnings report emphasized several operational strengths:
- The company achieved its highest full-year resident retention rate in history during 2025.
- Physical occupancy remained strong at 96.4% for the full year.
- The balance sheet was bolstered by a new $2.5 billion unsecured credit facility maturing in 2030.
- The Board reauthorized a share repurchase program for up to 13.0 million common shares, signaling continued commitment to returning capital.
Conclusion
Equity Residential's fourth-quarter results underscore a story of operational resilience and strategic capital management. While revenue growth was slightly softer than expected, robust profitability metrics and a confident outlook for 2026 suggest management is navigating a normalized market effectively. The aggressive share repurchase program reflects a belief in the intrinsic value of the stock. Investors will now watch for the company's ability to execute on its modest growth guidance while continuing to balance portfolio optimization with shareholder returns.
For a detailed breakdown of future earnings estimates and historical performance, you can review more information on Equity Residential's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
