Valued at a market cap of $25.4 billion, Equity Residential (EQR) is a real estate investment trust (REIT) that primarily acquires, develops, and manages residential rental properties. The Chicago, Illinois-based company owns and operates a high-quality portfolio of apartment communities, mainly concentrated in urban and high-density suburban markets. 

Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and EQR fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the REIT - residential industry. With its scale, strong brand reputation, and focus on high-demand metropolitan areas, the company benefits from stable rental income and long-term asset appreciation.

Despite its notable strength, this residential REIT has dipped 17.2% from its 52-week high of $78.84, reached on Sep. 16, 2024. Shares of EQR have declined 5.1% over the past three months, considerably lagging behind the S&P 500 Index’s ($SPX) 10.7% return during the same time frame.

In the longer term, EQR has fallen 15.7% over the past 52 weeks, significantly underperforming SPX's 17.6% uptick over the same time period. Moreover, on a YTD basis, shares of EQR are down 8.6%, compared to SPX’s 12.5% surge.

To confirm its bearish trend, EQR has been trading below its 200-day moving average since early March, and has remained below its 50-day moving average since mid-June, with slight fluctuations. 

On Aug. 4, EQR released its Q2 results, and its shares surged 1.2% in the following trading session. While the company’s revenue of $768.8 million grew 4.7% from the year-ago quarter, it missed the consensus estimates by a small margin. Nonetheless, its normalized FFO (NFFO) of $0.99 per share improved 2.1% year-over-year, meeting analyst expectations. Moreover, EQR raised its fiscal 2025 NFFO per share guidance, further bolstering investor confidence. It now expects it to be between $3.97 and $4.03. 

EQR has outpaced its rival, AvalonBay Communities, Inc. (AVB), which declined 17.9% over the past 52 weeks and 12.3% on a YTD basis. 

Despite EQR’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 26 analysts covering it, and the mean price target of $74.38 suggests a 13.9% premium to its current price levels.