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Douglas Emmett (DEI)
NYSE:DEI
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Douglas Emmett
(NYSE:DEI)
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Rating:64Neutral
Price Target:
$17.50
▲(6.97% Upside)
Douglas Emmett's stock score reflects a balance of moderate financial health and positive technical momentum. The high leverage and cash flow pressures are significant concerns, but the bullish technical indicators and strong leasing activity provide a positive outlook. The high P/E ratio suggests potential overvaluation, tempered by a decent dividend yield. Overall, the stock presents a moderate investment opportunity with both risks and potential rewards.
Positive Factors
Strong Leasing Activity
The strong leasing activity, including new leases, indicates robust demand for DEI's properties, supporting long-term revenue stability and growth.
Residential Portfolio Success
Full occupancy and rising rents in the residential portfolio demonstrate effective management and strong market demand, contributing to sustained cash flow.
Office to Residential Conversion
Converting office space to residential units can enhance asset value and reduce vacancy, aligning with urban living trends and boosting long-term profitability.
Negative Factors
High Leverage
High leverage increases financial risk, potentially limiting flexibility in capital allocation and increasing vulnerability to interest rate hikes.
Decreased FFO and AFFO
Decreased FFO and AFFO indicate challenges in maintaining profitability, which could affect future dividend payouts and investment capacity.
Rising Redevelopment Costs
Increased redevelopment costs can strain financial resources and delay project completion, impacting short-to-medium-term cash flow and profitability.
Douglas Emmett (DEI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.36B
Dividend Yield4.59%
Average Volume (3M)1.53M
Price to Earnings (P/E)76.5
Beta (1Y)1.02
Revenue Growth-0.57%
EPS GrowthN/A
CountryUS
Employees770
SectorReal Estate
Sector Strength53
IndustryREIT - Office
Share Statistics
EPS (TTM)-0.04
Shares Outstanding167,446,350
10 Day Avg. Volume1,404,440
30 Day Avg. Volume1,530,300
Financial Highlights & Ratios
PEG Ratio-0.88
Price to Book (P/B)1.51
Price to Sales (P/S)3.15
P/FCF Ratio18.35
Enterprise Value/Market Cap2.76
Enterprise Value/Revenue9.27
Enterprise Value/Gross Profit17.44
Enterprise Value/Ebitda14.28
Forecast
1Y Price Target
$17.42Price Target Upside6.48% Upside
Rating ConsensusHold
Number of Analyst Covering6
Douglas Emmett Business Overview & Revenue Model
Company DescriptionDouglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.
How the Company Makes MoneyDouglas Emmett generates revenue primarily through leasing its office and multifamily properties to tenants. The company earns rental income from long-term leases with corporate clients and residential tenants, which constitutes a significant portion of its revenue stream. Additionally, DEI benefits from property management services, as it manages its portfolio of assets to optimize occupancy rates and rental income. The company may also realize gains through the sale of properties, particularly those that appreciate in value over time or reach operational maturity. Partnerships with local businesses and community organizations can enhance tenant retention and drive demand for its properties, further contributing to its financial performance.
Douglas Emmett Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of achievements in leasing activity and residential portfolio success alongside challenges such as decreased FFO and rising redevelopment costs. Despite strong leasing and strategic conversions, financial metrics show certain strains.Q2-2025 Updates
Positive Updates
Strong Leasing Activity
Douglas Emmett leased 973,000 square feet of office space, including over 300,000 square feet of new leases, achieving positive absorption for 3 of the last 4 quarters.
Residential Portfolio Success
The multifamily portfolio had full occupancy, increasing rents, and same-property cash NOI growth exceeding 10%.
Office to Residential Conversion
Plans to convert the 10900 Wilshire office property into 320 apartments in Westwood, aiming to enhance value and reduce office vacancy.
Refinancing Progress
Refinanced a $200 million office loan with a new nonrecourse interest-only loan at competitive rates, maturing in August 2032.
Negative Updates
Decreased FFO and AFFO
Funds from operations (FFO) decreased to $0.37 per share, and adjusted funds from operations (AFFO) decreased to $54.5 million.
Same-Property Cash NOI Decline
Same-property cash NOI was down 1.1% due to a prior year's large property tax refund, creating a tough comparison.
Cash Re-Leasing Spreads Declined
Cash spreads decreased by 13.3% during the quarter.
Brentwood Redevelopment Costs
The redevelopment costs for The Landmark Residences in Brentwood are expected to rise to approximately $400 million.
Company Guidance
During the call, Douglas Emmett provided guidance for 2025, projecting net income per common share diluted to be between $0.07 and $0.11 and narrowing the guidance range for FFO per fully diluted share to be between $1.43 and $1.47. The company reported that revenue increased by 2.7% compared to the second quarter of 2024, while FFO decreased to $0.37 per share and AFFO decreased to $54.5 million. Same-property cash NOI was down 1.1% due to a tough comparison from a large property tax refund in the prior year. Excluding property tax refunds, same-property cash NOI would have been slightly positive. Additionally, the company's residential portfolio remained essentially fully leased at 99.3%, and they highlighted strong demand and increasing rents, with same-property cash NOI growth exceeding 10%.Douglas Emmett Financial Statement Overview
Summary
Douglas Emmett presents a solid financial profile with stable revenue and profit margins, reflecting operational efficiency. Despite high leverage, the company maintains stable equity levels. Cash flows are positive, with growth in free cash flow supporting future expansions. Continuous monitoring of debt levels is recommended to mitigate financial risks.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.65
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.55
Neutral
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 999.70M | 986.48M | 1.02B | 993.65M | 918.40M | 891.52M |
| Gross Profit | 531.50M | 636.22M | 198.91M | 659.83M | 615.00M | 586.11M |
| EBITDA | 649.21M | 590.86M | 593.58M | 619.52M | 574.92M | 566.67M |
| Net Income | 37.70M | 23.52M | -42.71M | -53.65M | -84.70M | -106.22M |
Balance Sheet | ||||||
| Total Assets | 9.43B | 9.40B | 9.64B | 9.75B | 9.35B | 9.25B |
| Cash, Cash Equivalents and Short-Term Investments | 426.89M | 444.62M | 523.08M | 268.84M | 335.90M | 172.38M |
| Total Debt | 5.58B | 5.51B | 5.55B | 5.20B | 5.02B | 4.76B |
| Total Liabilities | 5.84B | 5.75B | 5.80B | 5.47B | 5.37B | 5.25B |
| Stockholders Equity | 2.00B | 2.06B | 2.22B | 2.56B | 2.42B | 2.44B |
Cash Flow | ||||||
| Free Cash Flow | 126.92M | 169.30M | 237.81M | 258.77M | 153.86M | 122.62M |
| Operating Cash Flow | 391.73M | 408.69M | 426.96M | 496.89M | 446.95M | 420.22M |
| Investing Cash Flow | -235.71M | -240.76M | -233.59M | -560.95M | -288.71M | -265.18M |
| Financing Cash Flow | -290.27M | -246.46M | 60.87M | -3.00M | 5.25M | -136.33M |
Douglas Emmett Technical Analysis
Positive
16.36
Price Trends
15.59
Positive
15.03
Positive
15.82
Positive
Market Momentum
0.37
Negative
56.33
Neutral
52.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEI, the sentiment is Positive. The current price of 16.36 is above the 20-day moving average (MA) of 16.04, above the 50-day MA of 15.59, and above the 200-day MA of 15.82, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 56.33 is Neutral, neither overbought nor oversold. The STOCH value of 52.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | 4.90B | 79.06 | 0.82% | 4.39% | 13.07% | -4.94% | |
69 Neutral | 5.21B | 23.66 | 4.08% | 4.95% | 2.26% | 10.15% | |
68 Neutral | 3.48B | 27.51 | 5.44% | 6.21% | -2.16% | -16.41% | |
64 Neutral | $3.36B | 76.52 | 1.74% | 4.59% | -0.57% | ― | |
61 Neutral | 4.93B | -115.55 | 0.78% | 4.72% | 15.25% | 79.18% | |
53 Neutral | 1.11B | -1.02 | -12.34% | ― | -9.68% | -69.03% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
Performance Comparison
DEI
Douglas Emmett
16.36
0.11
0.68%
CUZ
Cousins Properties
29.27
1.36
4.87%
HIW
Highwoods Properties
32.20
1.28
4.14%
HPP
Hudson Pacific Properties
2.87
-2.38
-45.33%
KRC
Kilroy Realty
44.18
6.50
17.25%
SLG
SL Green Realty
65.67
-2.94
-4.29%
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.