Analysts: Weak economy could slow Equity Residential growth
NEW YORK—One analyst downgraded Equity Residential on Friday, saying economic headwinds could slow growth in the apartment real estate investment trust's portfolio.
In a client note Friday, Deutsche Bank analyst Lou Taylor downgraded the REIT to "Hold" from "Buy." While the analyst likes Equity Residential's mix of markets and believes the outlook for 2008 is unchanged, Taylor also expects, like the REIT's management, slow growth over the next few quarters.
"EQR is subject to falling rents and occupancy rates due to a weakening economy. If the group rallies, EQR could drift higher with the sector," Taylor wrote.
Similarly, Citi analyst Michael Bilerman said in a note late Thursday that fundamentals are holding up so far, but during the peak leasing season in the summer, job losses likely will hurt rental rates.
However, Bilerman maintains a "Hold" rating on the shares.
On Wednesday, Equity Residential said its first-quarter results slipped slightly but met Wall Street's expectations.
Shares of the Chicago-based REIT rose $1.28, or 3 percent, to $44.27 in midday trading.
