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Douglas Emmett (DEI)
NYSE:DEI
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Douglas Emmett
(NYSE:DEI)
66Neutral
Positive Factors
Acquisitions
The JV acquisition of 10900 Wilshire through a deed-in-lieu-of-foreclosure is seen as accretive after stabilization.
Financial Performance
Douglas Emmett reported 3Q24 FFO/sh of $0.43, $0.02 above estimates, and raised the midpoint its 2024 FFO/sh guidance by $0.02 to $1.71.
Negative Factors
Legal and Financial Risks
The LA Superior Court ruling against DEI’s evictions at Barrington Plaza may impact planned renovations and potentially expose the company to financial penalties.
Occupancy Challenges
DEI's L.A. office portfolio remains affected by a slow return-to-work environment and struggling media and entertainment demand.
Douglas Emmett (DEI) vs. S&P 500 (SPY)
Market Cap
$3.03B
Dividend Yield5.1%
Average Volume (3M)2.01M
Price to Earnings (P/E)47.1
Beta (1Y)1.11
Revenue Growth-1.98%
EPS GrowthN/A
CountryUS
Employees770
SectorReal Estate
Sector Strength65
IndustryREIT - Office
Share Statistics
EPS (TTM)0.24
Shares Outstanding167,446,350
10 Day Avg. Volume2,233,368
30 Day Avg. Volume2,007,432
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)1.22
Price to Sales (P/S)0.00
P/FCF Ratio15.54
Enterprise Value/Market Cap2.52
Enterprise Value/Revenue1.91
Enterprise Value/Gross Profit11.98
Enterprise Value/Ebitda3.01
Forecast
1Y Price Target
$18.00Price Target Upside22.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Douglas Emmett Business Overview & Revenue Model
Company DescriptionDouglas Emmett, Inc. (DEI) is a real estate investment trust (REIT) based in Santa Monica, California, focusing primarily on owning, acquiring, and managing office and multifamily properties in premier coastal submarkets of Los Angeles and Honolulu. The company's portfolio is strategically located in some of the most sought-after neighborhoods, providing high-quality office spaces and luxury apartments to a diverse range of tenants.
How the Company Makes MoneyDouglas Emmett generates revenue primarily through leasing office and multifamily properties. The company's key revenue streams include rental income from its office and residential tenants. By owning properties in high-demand areas, DEI benefits from stable occupancy rates and the ability to adjust rental rates in response to market conditions. The company's focus on Class A office buildings and luxury apartments enables it to attract premium tenants, thereby maximizing rental revenue. Additionally, Douglas Emmett engages in property management services, which further contribute to its income. Strategic acquisitions and developments in core markets also play a significant role in enhancing its revenue potential.
Douglas Emmett Financial Statement Overview
Summary
Douglas Emmett demonstrates stable revenue and profit margins, indicative of operational efficiency. The company faces high leverage, posing potential financial risks, though equity levels remain stable. Positive cash flow growth supports future investments, but debt levels require careful monitoring.Income Statement
Douglas Emmett shows a stable gross profit margin with minor fluctuations, indicating strong cost control. The net profit margin has improved over the last year due to increasing net income, signaling enhanced profitability. Revenue growth has been positive, although the pace has varied. EBIT and EBITDA margins are stable, reflecting consistent operating efficiency.72
Positive
Balance Sheet
The debt-to-equity ratio is relatively high, suggesting significant leverage, which might pose financial risks if not managed properly. However, the equity ratio remains stable, indicating a reasonable proportion of equity financing. Return on equity has improved, reflecting better profit generation from shareholder investments.65
Positive
Cash Flow
Free cash flow has shown growth, supporting potential reinvestment opportunities. The operating cash flow to net income ratio is strong, indicating good conversion of income into cash. However, the free cash flow to net income ratio fluctuates due to variations in net income, suggesting potential volatility in cash conversion.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 993.04M | 986.48M | 1.02B | 993.65M | 918.40M | 891.52M | Gross Profit |
| 636.25M | 636.22M | 198.91M | 659.83M | 615.00M | 586.11M | EBIT |
| 204.88M | 206.82M | 149.67M | 246.72M | 203.63M | 175.03M | EBITDA |
| 666.34M | 621.08M | 593.58M | 619.52M | 574.92M | 566.67M | Net Income Common Stockholders |
| 54.41M | 23.52M | -42.71M | -53.65M | -84.70M | -106.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 556.68M | 444.62M | 523.08M | 268.84M | 335.90M | 172.38M | Total Assets |
| 9.64B | 9.40B | 9.64B | 9.75B | 9.35B | 9.25B | Total Debt |
| 5.56B | 5.51B | 5.55B | 5.20B | 5.02B | 4.76B | Net Debt |
| 5.00B | 5.06B | 5.03B | 4.93B | 4.69B | 4.58B | Total Liabilities |
| 5.82B | 5.75B | 5.80B | 5.47B | 5.37B | 5.25B | Stockholders Equity |
| 2.20B | 2.06B | 2.22B | 2.56B | 2.42B | 2.44B |
| Cash Flow | Free Cash Flow | ||||
| 160.90M | 169.30M | 237.81M | 258.77M | 153.86M | 122.62M | Operating Cash Flow |
| 402.31M | 408.69M | 426.96M | 496.89M | 446.95M | 420.22M | Investing Cash Flow |
| -212.26M | -240.76M | -233.59M | -560.95M | -288.71M | -265.18M | Financing Cash Flow |
| -221.10M | -246.46M | 60.87M | -3.00M | 5.25M | -136.33M |
Douglas Emmett Technical Analysis
Neutral
14.74
Price Trends
14.78
Negative
15.98
Negative
16.53
Negative
Market Momentum
0.07
Negative
52.33
Neutral
58.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEI, the sentiment is Neutral. The current price of 14.74 is above the 20-day moving average (MA) of 14.42, below the 50-day MA of 14.78, and below the 200-day MA of 16.53, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 52.33 is Neutral, neither overbought nor oversold. The STOCH value of 58.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DEI.
Douglas Emmett Risk Analysis
Douglas Emmett disclosed 50 risk factors in its most recent earnings report. Douglas Emmett 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
Douglas Emmett Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.62B | ― | -2.11% | 2.59% | 1.67% | 73.75% | |
69 Neutral | $7.80B | 19.64 | 3.69% | 6.55% | 1.11% | -3.07% | |
66 Neutral | $3.03B | 47.14 | 2.49% | 5.10% | -1.98% | ― | |
66 Neutral | $4.71B | 83.72 | 1.15% | 4.57% | 10.93% | -31.07% | |
65 Neutral | $3.26B | 18.90 | 7.21% | 6.62% | -2.01% | 31.64% | |
60 Neutral | $2.82B | 10.29 | 0.31% | 8508.26% | 5.91% | -17.42% | |
58 Neutral | $4.44B | 663.10 | -0.13% | 5.18% | 13.36% | 94.82% |
* Real Estate Sector Average
Performance Comparison
DEI
Douglas Emmett
14.74
1.57
11.92%
CUZ
Cousins Properties
27.60
5.09
22.61%
HIW
Highwoods Properties
29.99
5.66
23.26%
KRC
Kilroy Realty
32.75
1.06
3.34%
SLG
SL Green Realty
58.28
9.14
18.60%
PGRE
Paramount Group
5.63
1.09
24.01%
Douglas Emmett Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 5.14%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with significant leasing successes and strong multifamily performance, contrasted by challenges from rising interest rates, flat NOI, and economic uncertainties. The highlights and lowlights are relatively balanced, indicating a cautious outlook with some positive achievements.Q1-2025 Updates
Positive Updates
Successful Leasing Activity
Leasing during the first quarter of 2025 was successful with positive absorption across the total office portfolio. Over 300,000 square feet of new leases were signed, with new leasing to tenants over 10,000 square feet well above historical averages.
Strong Multifamily Portfolio Performance
The multifamily portfolio maintained very high occupancy at 99.1% and experienced robust revenue growth, reflecting strong demand in coastal submarkets.
Positive Developments in Studio Plaza
Leasing at the Studio Plaza exceeded expectations as it was converted to a multi-tenant office building, with strong demand and leasing activities.
Progress in Investment Activities
Progress in developing a new residential building in Westwood, with JV's total investment expected to be $150 million to $200 million over a three to four year period.
Strategic Debt Refinancing
Closed a non-recourse $127.2 million loan for a residential property and refinanced a $335 million secured office loan at favorable rates.
Negative Updates
Interest Rate Impact on Income
Higher interest rates remain a drag on income, with the expectation that the cost of debt will increase by 100 to 200 basis points from the pre-COVID average of 3%.
Decreased FFO and AFFO
FFO decreased to $0.40 per share and AFFO decreased to $62.3 million compared to the same quarter in the previous year.
Flat Same Property NOI
Same property cash NOI remained essentially flat, indicating challenges in growing net operating income from existing properties.
Volatility and Economic Concerns
Concerns about broader economic volatility and national policy impacts on public markets, which could affect future office leasing and potentially lead to a recession.
Downward Pressure on Cash Spreads
Overall value of new leases increased by 0.9%, but cash spreads were down 12.6% due to larger tenants skewing the averages.
Company Guidance
During Douglas Emmett's quarterly earnings call for the first fiscal quarter of 2025, the company provided guidance on several key financial metrics. President and CEO Jordan Kaplan highlighted that leasing activities were strong, with over 300,000 square feet of new leases signed, and noted positive absorption across the total office portfolio. The company maintained stable in-place and asking rental rates despite a higher vacancy environment, and leasing at Studio Plaza exceeded expectations. The multifamily portfolio achieved nearly full occupancy with robust revenue growth. CFO Peter Seymour reported a 2.7% increase in revenue compared to the first quarter of 2024, though funds from operations (FFO) decreased to $0.40 per share, and adjusted funds from operations (AFFO) dropped to $62.3 million. Same-property cash net operating income (NOI) was essentially flat. For 2025, Douglas Emmett expects net income per common share diluted to be between $0.07 and $0.13, with FFO per fully diluted share projected between $1.42 and $1.48. The company's capital strategy includes refinancing existing debt, with anticipated increases in the cost of debt between 100 and 200 basis points above pre-COVID levels.Douglas Emmett Corporate Events
Executive/Board ChangesShareholder Meetings
Douglas Emmett Announces Board Members’ Retirement
Neutral
Apr 21, 2025
On April 17, 2025, Douglas Emmett, Inc. announced that its Chairman, Dan A. Emmett, and Board member, Ray C. Leonard, will retire from the Board at the end of their current terms and will not stand for reelection at the 2025 annual meeting of stockholders. Following their retirement, the Board will reduce its size to eight directors. The decision by both Mr. Emmett and Mr. Leonard to retire was not due to any disagreements with the company, and the company expressed gratitude for their service.
Spark’s Take on DEI Stock
According to Spark, TipRanks’ AI Analyst, DEI is a Neutral.
Douglas Emmett presents a mixed outlook with stable cash flow management but high financial leverage. The stock is currently in a bearish technical phase and appears overvalued based on the P/E ratio. Despite strong residential performance and strategic initiatives, challenges in the office segment and negative income guidance for 2025 weigh on the overall score.
To see Spark’s full report on DEI 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.