American Assets (AAT) AI Stock Analysis

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American Assets

(NYSE:AAT)

73Outperform

American Assets Trust exhibits a strong overall position with robust financial performance and effective cash management. The technical analysis reflects a bearish trend, but the valuation is attractive with a substantial dividend yield. The earnings call and recent corporate events highlight strategic strengths and resilience in leasing activities. While there are challenges in the mixed-use segment, the overall outlook remains positive, supported by a balanced financial strategy and market adaptability.

Positive Factors

Debt Repayment

The company repaid $325 million of debt, indicating efforts to strengthen its financial position.

Lease Improvement

AAT signed 18 comparable retail leases in 4Q24 at a +6.5% cash spread, which is an improvement over the T-4 quarter average of +4.5%.

Retail Performance

AAT reported 4Q24 FFO of 55c, supported by strong retail performance with a growth of +11.4% in SSNOI.

Negative Factors

Earnings Disappointment

The FY25 FFO guidance of $1.94 is below consensus estimates, suggesting potential disappointment.

Guidance Miss

Shares are expected to underperform as its newly issued 2025 guidance range missed expectations significantly.

Office Occupancy

Office total occupancy decreased to 85.0%, reflecting a decline in space utilization.

American Assets (AAT) vs. S&P 500 (SPY)

Market Cap

$1.22B

Dividend Yield6.74%

Average Volume (3M)464.15K

Price to Earnings (P/E)15.1

Beta (1Y)0.87

Revenue Growth12.64%

EPS Growth49.11%

CountryUS

Employees230

SectorReal Estate

Sector Strength67

IndustryREIT - Diversified

Share Statistics

EPS (TTM)0.70

Shares Outstanding61,134,730

10 Day Avg. Volume329,177

30 Day Avg. Volume464,152

Financial Highlights & Ratios

PEG Ratio0.36

Price to Book (P/B)1.00

Price to Sales (P/S)0.00

P/FCF Ratio12.51

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$21.00

Price Target Upside5.32% Upside

Rating ConsensusHold

Number of Analyst Covering2

American Assets Business Overview & Revenue Model

Company DescriptionAmerican Assets Trust, Inc. (AAT) is a real estate investment trust (REIT) that focuses on acquiring, improving, and managing premium retail, office, and residential properties primarily located in the western United States. The company operates a diversified portfolio that includes shopping centers, office buildings, multifamily properties, and mixed-use developments, catering to a range of tenants from commercial enterprises to residential occupants.

How the Company Makes MoneyAmerican Assets Trust, Inc. generates revenue primarily through the leasing of its diversified portfolio of real estate assets. The company collects rental income from tenants occupying its retail, office, and residential properties. This rental income forms the core of AAT's revenue stream. Additionally, the company may engage in property development and redevelopment projects, enhancing the value and appeal of its assets, which can lead to increased rental rates and occupancy levels. The trust also benefits from strategic partnerships and joint ventures that expand its market reach and portfolio diversity, contributing to its financial stability and growth.

American Assets Financial Statement Overview

Summary

American Assets demonstrates strong financial health with solid profitability margins, effective leverage management, and robust cash flow generation. The company shows consistent revenue growth and stable financial metrics, positioning it well within the REIT industry. Potential risks include leverage typical for the industry, but overall the financial strategy is balanced and sustainable.

Income Statement

Positive

American Assets shows solid profitability with consistent gross and net profit margins. The TTM data reveals a gross profit margin of 56.36% and a net profit margin of 17.57%, both indicating strong operational efficiency. Revenue growth has been moderate year-over-year, signaling steady expansion. The EBIT and EBITDA margins also reflect healthy profitability, with TTM figures of 37.45% and 55.27% respectively, highlighting operational strength.

Balance Sheet

Positive

The company maintains a strong equity position, with a debt-to-equity ratio of 1.46, indicating a balanced leverage level typical for the REIT industry. The equity ratio stands at 38.81%, reflecting a stable capital structure. Return on Equity (ROE) at 6.95% for TTM suggests moderate returns on shareholder investments, consistent with industry expectations.

Cash Flow

Positive

American Assets has demonstrated robust cash flow management. The TTM period shows a high operating cash flow to net income ratio of 1.90, indicating effective conversion of net income into cash. Free cash flow remains strong, with a free cash flow to net income ratio of 1.16, underscoring solid cash generation relative to earnings. The company also shows positive free cash flow growth, evidencing effective capital expenditure management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
455.77M	457.85M	441.16M	422.65M	375.83M	344.57M
	Gross Profit
256.81M	290.13M	277.21M	270.21M	246.05M	223.45M
	EBIT
170.62M	129.20M	121.75M	114.73M	99.87M	88.58M
	EBITDA
251.87M	273.69M	249.94M	238.07M	216.18M	196.87M
	Net Income Common Stockholders
80.07M	56.80M	50.38M	43.51M	28.38M	27.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
143.91M	425.66M	82.89M	49.57M	139.52M	137.33M
	Total Assets
2.97B	3.27B	2.98B	2.99B	3.02B	2.82B
	Total Debt
1.69B	2.03B	1.71B	1.65B	1.65B	1.41B
	Net Debt
-143.91M	1.61B	1.63B	1.60B	1.51B	1.27B
	Total Liabilities
1.82B	2.15B	1.83B	1.80B	1.81B	1.56B
	Stockholders Equity
1.15B	1.18B	1.20B	1.22B	1.24B	1.27B
Cash Flow		Free Cash Flow
93.06M	136.90M	105.77M	65.29M	63.74M	63.50M
	Operating Cash Flow
189.20M	207.11M	188.75M	179.07M	168.33M	126.98M
	Investing Cash Flow
-64.11M	-77.41M	-89.89M	-166.32M	-312.28M	-69.08M
	Financing Cash Flow
-112.39M	213.07M	-65.55M	-102.70M	144.42M	-28.31M

American Assets Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price19.94

Price Trends

50DMA

19.45

Positive

100DMA

21.44

Negative

200DMA

23.79

Negative

Market Momentum

MACD

0.08

Negative

RSI

60.51

Neutral

STOCH

78.92

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAT, the sentiment is Neutral. The current price of 19.94 is above the 20-day moving average (MA) of 19.09, above the 50-day MA of 19.45, and below the 200-day MA of 23.79, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 60.51 is Neutral, neither overbought nor oversold. The STOCH value of 78.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AAT.

American Assets Risk Analysis

American Assets disclosed 71 risk factors in its most recent earnings report. American Assets reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

American Assets Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AAT	73 Outperform	$1.22B	15.05	6.74%	6.74%	12.64%	49.11%
AHH	73 Outperform	$748.95M	129.65	3.05%	10.22%	-12.13%	-14.54%
UE	69 Neutral	$2.51B	30.17	6.48%	3.69%	6.18%	-72.21%
ALEX	67 Neutral	$1.29B	20.77	6.47%	5.06%	4.31%	39.56%
ESRT	64 Neutral	$1.32B	25.75	5.44%	1.79%	1.41%	3.11%
SAFE	60 Neutral	$1.12B	10.59	4.51%	4.52%	1.54%	―
Sector *	60 Neutral	$2.82B	10.29	0.39%	8508.26%	5.90%	-17.41%

* Real Estate Sector Average

Performance Comparison

AAT

American Assets

19.94

-1.02

-4.87%

ALEX

Alexander & Baldwin

17.68

1.90

12.04%

SAFE

Safehold

15.66

-4.06

-20.59%

ESRT

Empire State Realty

7.81

-1.40

-15.20%

AHH

Armada Hoffler Properties

7.39

-3.21

-30.28%

Urban Edge Properties

18.98

2.32

13.93%

American Assets Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 7.67%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a balanced outlook for American Assets Trust. Highlights included strong leasing activity in both office and retail segments, strategic acquisitions, and solid liquidity management. However, challenges were noted in the mixed-use portfolio with a decline in NOI and a decrease in FFO due to recent dispositions. The sentiment is balanced with significant achievements offset by notable challenges.

Q1-2025 Updates

Positive Updates

Strong Office Leasing Activity

Office leasing activity totaled approximately 140,000 square feet in Q1, with spreads on comparable spaces increasing 8% on a cash basis and 15% on a straight-line basis. The office portfolio ended Q1 at 85.5% leased, or 87.6% excluding One Beach, with all-time high average base rents.

Retail Portfolio Performance

The retail portfolio ended the quarter 97% leased, with executed leases totaling over 158,000 square feet. Comparable space spreads increased by 13% on a cash basis and 21% on a straight-line basis.

Multifamily Portfolio Strength

The San Diego multifamily communities ended Q1 approximately 95% leased with a blended rent increase of 2%. Same-store cash NOI for San Diego multifamily increased 3.5% year-over-year.

Strategic Property Acquisition

Acquired Genesee Parts Apartments, a nearly 200-unit multifamily community in San Diego, with current 97% lease rate and significant rent increase potential.

Dividend Announcement

The Board approved a quarterly dividend of $0.34 per share for Q2.

Liquidity and Debt Management

Liquidity of approximately $544 million and no debt maturities until 2027 after repaying Term Loan B, Term Loan C, and Series C notes totaling $325 million.

Negative Updates

Mixed-use Portfolio NOI Decline

The mixed-use portfolio's NOI declined by approximately 11.6% in Q1 2025 compared to the same period in 2024, primarily driven by lower-than-anticipated occupancy at Embassy Suites Waikiki.

Reduction in FFO

First quarter 2025 FFO decreased by approximately $0.03 per share compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition.

Challenges in Tourism

Decrease in domestic tourism and rate competition in Waikiki led to Embassy Suites underperformance with average paid occupancy of 85%, 6% lower than budget.

Company Guidance

During the first quarter of 2025, American Assets Trust Inc. reported a Funds From Operations (FFO) per diluted share of $0.52, aligning with their initial guidance, and a 3% increase in same-store cash Net Operating Income (NOI) compared to the same period last year. The office portfolio saw a leasing activity of about 140,000 square feet, with an 8% increase in cash basis rent spreads and a 15% increase on a straight-line basis. The retail segment demonstrated resilience, ending the quarter 97% leased with a 13% increase in cash basis rent spreads. Meanwhile, the multifamily portfolio in San Diego ended approximately 95% leased, showing a 3.5% year-over-year increase in same-store cash NOI. The mixed-use portfolio faced challenges, with Waikiki Beach Walk recording an 11% decrease in NOI due to reduced domestic tourism, though it performed well within its comp set. The company reaffirmed its full-year 2025 guidance range of $1.87 to $2.01 per FFO share, underscoring confidence in its diversified portfolio's strength and stability.

American Assets Corporate Events

M&A TransactionsFinancial Disclosures

American Assets Reports Q1 2025 Financial Results

Neutral

Apr 29, 2025

American Assets Trust, Inc. reported its financial results for the first quarter of 2025, highlighting a net income of $42.5 million, or $0.70 per diluted share, and a 10% year-over-year decrease in Funds from Operations (FFO) per diluted share to $0.52. The company completed the sale of Del Monte Center for $123.5 million and acquired Genesee Park for $67.9 million, while leasing significant office and retail space with notable rent increases. Despite a decrease in FFO due to prior litigation income and increased interest expenses, the company saw improvements in its same-store retail segment and achieved a gain from the sale of Del Monte Center.

Spark’s Take on AAT Stock

According to Spark, TipRanks’ AI Analyst, AAT is a Neutral.

American Assets Trust presents a balanced outlook with strengths in financial performance and high dividend yield. However, technical analysis indicates bearish trends, and the earnings call highlighted challenges, particularly in the office segment and expected FFO decrease for 2025. These factors suggest a cautious approach, with the potential for improvement if strategic initiatives are successfully implemented.

To see Spark’s full report on AAT stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.