We expect leading multi-family real estate investment trust
) -to beat expectations when it reports fourth-quarter 2012
results after the closing bell tomorrow, Feb 5.
Why a Likely Positive Surprise?
Our proven model shows that Equity Residential is likely to beat
earnings because it has the appropriate combination of two key
Positive Zacks ESP: Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) is +2.67% as the Most Accurate Estimate stands at 77 cents per
share and the Zacks Consensus Estimate is 75 cents. This
indicates a likely positive earnings surprise.
Zacks Rank #3 (Hold): Equity Residential's Zacks Rank # 3
increases the predictive power of its ESP. The combination of its
Zacks Rank and Earnings ESP makes us confident of a positive
earnings surprise in the to-be-reported quarter.
Stocks with Zacks Ranks of #1, #2 and #3 have a significantly
higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings
Key Earnings Drivers
Equity Residential is well poised to maintain its growth curve
backed by its diverse portfolio of properties in some of the best
long-term apartment markets in the country. Moreover, the
strengthening apartment fundamentals and superior execution of
pricing and expense control measures are expected to lead to a
positive earnings surprise in the fourth quarter.
The company is actively repositioning its portfolio, which will
further strengthen its presence in the upscale region. In
addition, the sale of non-core assets and the Archstone
acquisition fit well with its growth strategy.
Notably, this deal, that was penned along with
Avalonbay Communities Inc.
), which entitles Equity Residential to acquire 60% of
Archstone's assets and liabilities (and the rest to be acquired
by Avalonbay), will help improve the overall quality of the
portfolio with assets in high-barrier, high-growth coastal
Other Stocks to Consider
Equity Residential is not the only stock looking up this earnings
season. We also see likely earnings beats coming from these 2
) has an Earnings ESP of +7.32% and a Zacks Rank #3 (Hold). The
company is scheduled to report its earnings on Feb 6 before the
) has an Earnings ESP of +2.06% and a Zacks Rank #2. The company
is scheduled to report its earnings on Feb 15 before the opening
AVALONBAY CMMTY (AVB): Free Stock Analysis
EQUITY RESIDENT (EQR): Free Stock Analysis
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