Equity Residential (EQR) faces a period of elevated uncertainty over the next year amid its pending merger with AvalonBay Communities (AVB), RBC Capital Markets analysts said in a note emailed Tuesday.

Analysts expect financial uncertainty as they get used to any reporting changes, new models, and issues with historical comparability.

RBC said there will likely be a high level of investor focus on the company's operational execution and delivery of the synergy targets, which typically obscures its underlying performance.

Analysts said that while the deal is a merger of equals with no premium, it will be initially dilutive. RBC said that Equity Residential is unlikely to undertake share buybacks until after the deal closes.

RBC downgraded the company's rating to sector perform from outperform, and adjusted its price target to $70 from $69.

Price: 67.68, Change: +0.34, Percent Change: +0.50