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American Assets (AAT) AI Stock Analysis

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AAT

American Assets

(NYSE:AAT)

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Neutral 62 (OpenAI - 4o)
Rating:62Neutral
Price Target:
$21.00
▲(5.58% Upside)
American Assets Trust Inc. shows a stable financial position with strong profitability margins, but faces challenges in revenue growth and cash flow generation. The high leverage poses a risk, although operational efficiency remains a strength. Technical indicators suggest a neutral to slightly bearish outlook. The stock's valuation is reasonable with an attractive dividend yield. The earnings call reflects confidence with increased guidance, but challenges in specific segments remain.
Positive Factors
Retail Portfolio Performance
The strong leasing activity and high occupancy rate in the retail segment indicate robust demand and effective asset management, which can drive stable revenue streams and enhance long-term profitability.
Increased 2025 Guidance
Raising the full-year guidance reflects management's confidence in operational execution and market conditions, suggesting potential for sustained earnings growth and shareholder value creation.
Multifamily Portfolio Stability
High occupancy and rent growth in the multifamily segment demonstrate strong demand and pricing power, contributing to stable cash flows and resilience against market fluctuations.
Negative Factors
High Leverage
Significant leverage increases financial risk, especially if interest rates rise, potentially constraining the company's ability to invest in growth or weather economic downturns.
Cash Flow Challenges
Declining cash generation limits the company's ability to fund operations, reduce debt, or invest in new opportunities, potentially impacting long-term financial health and growth prospects.
Hawaii Hotel Weakness
Weak performance in the Hawaii hotel market suggests challenges in demand or pricing, which could pressure profitability and require strategic adjustments to improve asset utilization and returns.

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

American Assets Business Overview & Revenue Model

Company DescriptionAmerican Assets Trust, Inc. (AAT) is a real estate investment trust (REIT) based in the United States that focuses on the acquisition, development, and management of high-quality retail, office, and multifamily properties. The company primarily operates in key markets along the West Coast, and its portfolio includes shopping centers, office buildings, and residential complexes, catering to a diverse range of tenants and consumers. AAT aims to create long-term value through strategic investments and active asset management.
How the Company Makes MoneyAmerican Assets generates revenue primarily through leasing its properties to tenants, which includes retail stores, office tenants, and residential renters. The company earns rental income from long-term leases and short-term leases, depending on the property type. Additionally, American Assets may generate income from property management services offered to third-party owners. The company's revenue model also includes potential gains from property sales and development projects, enhancing its overall profitability. Key partnerships with tenants, local governments, and investment firms can also contribute to its earnings by providing opportunities for new developments and joint ventures.

American Assets Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of steady performance and challenges. While the retail and multifamily sectors show strong leasing activity and stability, the office and mixed-use segments face difficulties. The increase in full-year guidance indicates overall confidence, but significant challenges remain in specific areas such as the Hawaii hotel market.
Q2-2025 Updates
Positive Updates
Steady Performance Amid Mixed Environment
FFO per diluted share was $0.52, and same-store cash NOI was approximately flat for Q2 and up 1.4% year-to-date compared to the prior year, reflecting steady performance in a mixed operating environment.
Strong Retail Performance
Retail portfolio ended the quarter 98% leased with same-store cash NOI growth of 4.5%. Executed over 220,000 square feet of new and renewal leases in Q2, with spreads increasing over 7% on a cash basis and 22% on a straight-line basis.
Positive Leasing Activity
Completed approximately 102,000 square feet of leasing during the quarter, with comparable rent spreads decreasing 2% on a cash basis and increasing 10% on a straight-line basis. Entered Q3 with approximately 17,000 square feet of executed leases and an additional 111,000 square feet in active lease documentation.
Multifamily Portfolio Stability
Multifamily portfolio ended the quarter approximately 94% leased with a blended rent increase of 6%.
Increased 2025 Guidance
Increased full year 2025 guidance range to $1.89 to $2.01 per FFO share with a midpoint of $1.95 per FFO share, reflecting steady momentum across core sectors.
Negative Updates
Office Portfolio Challenges
Office portfolio ended the quarter 82% leased, with same-store office cash NOI approximately flat for the quarter.
Mixed-Use Portfolio Decline
NOI declined 5% compared to Q2 last year, driven by softer performance at Embassy Suites with the hotel down approximately 15%, reflecting lower paid occupancy and RevPAR.
Multifamily NOI Decline in Portland
Same-store multifamily portfolio's NOI declined by 3.9%, primarily due to lower rental income at Hassalo on Eighth property in Portland and higher operating expenses at Pacific Ridge property in San Diego.
Hawaii Hotel Weakness
Hotel NOI declined due to lower-than-anticipated ADR at Embassy Suites Waikiki, with RevPAR for Q2 '25 down 4%.
Company Guidance
During the American Assets Trust Inc.'s Second Quarter 2025 Earnings Call, the company provided updated guidance for the fiscal year. The full year 2025 guidance range was increased to $1.89 to $2.01 per FFO share, with a midpoint of $1.95, reflecting a $0.01 increase over the initial midpoint of $1.94. The company reported a second quarter FFO per diluted share of $0.52 and a net income attributable to common stockholders per share of $0.09. The same-store cash NOI was approximately flat year-over-year in Q2 2025 compared to Q2 2024. The office portfolio ended the quarter 82% leased, and the retail portfolio showed strong performance with a 4.5% increase in same-store cash NOI. The multifamily segment saw a 3.9% NOI decline, impacted by lower rental income and higher operating expenses. The mixed-use Waikiki Beach Walk in Oahu reported a 5% NOI decline, largely due to decreased hotel performance. The company maintains a robust liquidity position with approximately $544 million, including $144 million in cash and $400 million from the revolving credit line. Their net debt-to-EBITDA ratio was 6.3x on a trailing 12-month basis, and the interest coverage ratio stood at 3.1x.

American Assets Financial Statement Overview

Summary
American Assets shows a stable financial position with strong profitability margins, but faces challenges in revenue growth and cash flow generation. The high leverage poses a risk, although operational efficiency remains a strength. Continued focus on improving revenue and managing debt levels will be crucial for future stability and growth.
Income Statement
65
Positive
The income statement shows a mixed performance. The gross profit margin remains strong at around 63%, indicating efficient cost management. However, the net profit margin has seen fluctuations, currently at 16.26% for TTM, which is an improvement from previous years. Revenue growth has been negative recently, which is a concern. The EBIT and EBITDA margins are solid, reflecting good operational efficiency.
Balance Sheet
60
Neutral
The balance sheet reveals a high debt-to-equity ratio of 1.50 in TTM, which indicates significant leverage and potential risk if interest rates rise. Return on equity is modest at 6.27%, suggesting moderate profitability relative to equity. The equity ratio is not explicitly calculated, but the balance sheet structure shows a reasonable proportion of equity to assets.
Cash Flow
55
Neutral
Cash flow analysis indicates challenges, with a negative free cash flow growth rate of -13.44% in TTM, suggesting declining cash generation. The operating cash flow to net income ratio is strong at 1.79, indicating good cash conversion from earnings. However, the free cash flow to net income ratio is moderate at 0.55, reflecting potential constraints in cash available for expansion or debt reduction.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue452.81M457.85M441.16M422.65M375.83M344.57M
Gross Profit284.89M290.13M277.21M270.21M246.05M223.45M
EBITDA248.83M254.66M249.94M238.07M212.22M196.87M
Net Income73.63M56.80M50.38M44.15M28.94M-51.14M
Balance Sheet
Total Assets2.96B3.27B2.98B2.99B3.02B2.82B
Cash, Cash Equivalents and Short-Term Investments143.74M425.66M82.89M49.57M139.52M137.33M
Total Debt1.71B2.03B1.71B1.67B1.68B1.44B
Total Liabilities1.82B2.15B1.83B1.80B1.81B1.56B
Stockholders Equity1.13B1.18B1.20B1.22B1.24B1.27B
Cash Flow
Free Cash Flow98.24M136.90M105.77M65.29M63.74M63.50M
Operating Cash Flow179.09M207.11M188.75M179.07M168.33M126.98M
Investing Cash Flow-37.36M-77.41M-89.89M-166.32M-312.28M-69.08M
Financing Cash Flow-112.87M213.07M-65.55M-102.70M144.42M-28.31M

American Assets Technical Analysis

Technical Analysis Sentiment
Positive
Last Price19.89
Price Trends
50DMA
20.10
Positive
100DMA
19.88
Positive
200DMA
20.04
Positive
Market Momentum
MACD
-0.15
Negative
RSI
53.81
Neutral
STOCH
76.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAT, the sentiment is Positive. The current price of 19.89 is above the 20-day moving average (MA) of 19.87, below the 50-day MA of 20.10, and below the 200-day MA of 20.04, indicating a bullish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 53.81 is Neutral, neither overbought nor oversold. The STOCH value of 76.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AAT.

American Assets Risk Analysis

American Assets disclosed 72 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$1.12B10.694.38%4.47%1.59%
71
Outperform
$1.23B15.757.79%5.33%5.60%93.88%
65
Neutral
$2.17B12.193.79%4.94%3.15%1.96%
65
Neutral
$1.23B30.314.36%1.82%1.77%-8.72%
62
Neutral
$1.20B16.106.26%6.81%11.68%37.31%
59
Neutral
$684.11M73.373.55%9.22%-25.73%
55
Neutral
$1.71B-11.87%11.13%-11.06%29.36%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AAT
American Assets
20.11
-5.77
-22.30%
ALEX
Alexander & Baldwin
16.94
-0.44
-2.53%
SAFE
Safehold
15.84
-6.57
-29.32%
ESRT
Empire State Realty
7.76
-2.97
-27.68%
AHH
Armada Hoffler Properties
6.80
-3.43
-33.53%
GNL
Global Net Lease
7.62
0.41
5.69%

American Assets Corporate Events

Financial Disclosures
American Assets Reports Q2 2025 Financial Results
Neutral
Jul 29, 2025

American Assets Trust, Inc. reported its financial results for the second quarter ending June 30, 2025, with a net income of $5.5 million for the quarter and $48.0 million for the first half of the year. The company experienced a decrease in Funds from Operations (FFO) compared to the previous year, primarily due to the absence of litigation income received in 2024 and increased interest expenses. Despite these challenges, the company increased its FFO guidance for 2025, reflecting a positive outlook. Leasing activity remained robust, with significant office and retail space leased during the quarter, although office occupancy rates saw a decline compared to the previous year.

Business Operations and Strategy
American Assets Engages Investors at NAREIT Conference
Neutral
Jun 4, 2025

American Assets Trust, Inc. announced that its senior management team will meet with investors and analysts on June 4, 2025, during the NAREIT REITweek Conference. The presentation materials for this event are available on the company’s website, indicating a proactive approach to investor relations and transparency.

Executive/Board ChangesShareholder Meetings
American Assets Concludes 2025 Annual Stockholders Meeting
Neutral
Jun 2, 2025

On June 2, 2025, American Assets Trust, Inc. held its 2025 Annual Meeting of Stockholders, where key proposals were voted on. The stockholders elected five directors to serve until the next annual meeting in 2026, ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025, and approved an advisory resolution on executive compensation for the fiscal year ended December 31, 2024.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Oct 22, 2025