Artis Real Estate Investment (AX.UN) AI Stock Analysis

95 Followers

Top Page

Artis Real Estate Investment

(TSX:AX.UN)

67Neutral

Artis Real Estate Investment shows resilience with strategic debt reduction and asset management, despite revenue and profitability challenges. The stock's technical indicators are positive, and the high dividend yield is attractive. However, strategic risks and potential income volatility limit the upside potential.

Artis Real Estate Investment (AX.UN) vs. S&P 500 (SPY)

Market Cap

$709.39M

Dividend Yield8.41%

Average Volume (3M)176.83K

Price to Earnings (P/E)―

Beta (1Y)1.09

Revenue Growth-10.56%

EPS Growth81.41%

CountryCA

Employees143

SectorReal Estate

Sector Strength79

IndustryREIT - Diversified

Share Statistics

EPS (TTM)-0.58

Shares Outstanding98,938,120

10 Day Avg. Volume142,981

30 Day Avg. Volume176,830

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.89

Price to Cash Flow (P/CF)8.00

P/FCF Ratio4.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$7.51

Price Target Upside4.68% Upside

Rating ConsensusHold

Number of Analyst Covering0

Artis Real Estate Investment Business Overview & Revenue Model

Company DescriptionArtis is a diversified Canadian real estate investment trust investing in industrial and office properties in Canada and the United States. Since 2004, Artis has executed an aggressive but disciplined growth strategy, building a portfolio of commercial properties in select markets in Canada and the United States. As of September 30, 2020, Artis' commercial property comprises approximately 23.8 million square feet of leasable area.

How the Company Makes MoneyArtis Real Estate Investment Trust generates revenue primarily through the acquisition, management, and leasing of its diversified portfolio of commercial properties. Key revenue streams include rental income from tenants, which is the largest source of income, and property management fees. Additionally, Artis may engage in strategic property sales, generating capital gains that contribute to its earnings. The company also benefits from partnerships with various property management firms and development projects, enhancing its revenue potential through shared ventures and expansion opportunities. Artis's financial performance is influenced by factors such as occupancy rates, lease agreements, property market conditions, and economic trends affecting the real estate sector.

Artis Real Estate Investment Financial Statement Overview

Summary

Artis Real Estate Investment shows a mixed financial performance. Operational efficiencies are evident, but revenue growth and profitability challenges persist. The balance sheet reflects high leverage, which can be risky. However, stable cash flows provide some cushion against financial volatility.

Income Statement

Neutral

The company's revenue has been declining over the years, with a significant drop from 2019 to 2024. The gross profit margin has remained relatively stable, but the net profit margin has been negative in recent years, indicating ongoing profitability challenges. The EBIT margin remained strong in 2024, suggesting operational efficiency despite revenue challenges.

Balance Sheet

Neutral

The debt-to-equity ratio has been relatively high, indicating significant leveraging. However, the equity ratio has shown some stability, suggesting a fair portion of assets are funded by equity. The negative trend in stockholders' equity over recent years is a concern, impacting overall financial stability.

Cash Flow

Positive

Operating cash flow has been fairly stable, which is positive. However, the free cash flow growth has been inconsistent. The operating cash flow to net income ratio is strong, suggesting good cash generation relative to net income. The cash flow statement indicates that despite declines in revenue, the company maintains healthy cash flows, which is a positive sign.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
300.37M	335.84M	372.51M	419.50M	458.92M
	Gross Profit
163.23M	184.02M	209.98M	237.78M	269.27M
	EBIT
163.23M	109.83M	293.64M	237.78M	269.27M
	EBITDA
53.88M	-217.19M	294.89M	232.92M	265.09M
	Net Income Common Stockholders
-47.41M	-332.07M	-5.29M	389.18M	21.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.79M	28.94M	29.17M	221.47M	34.70M
	Total Assets
2.80B	3.74B	4.55B	4.58B	4.86B
	Total Debt
1.13B	1.91B	2.21B	1.97B	2.40B
	Net Debt
1.10B	1.88B	2.19B	1.74B	2.36B
	Total Liabilities
1.22B	2.02B	2.32B	2.12B	2.53B
	Stockholders Equity
1.58B	1.72B	2.23B	2.46B	2.33B
Cash Flow		Free Cash Flow
79.73M	79.59M	140.72M	202.28M	176.31M
	Operating Cash Flow
80.14M	79.96M	140.74M	202.29M	176.33M
	Investing Cash Flow
652.11M	298.39M	-288.99M	607.47M	165.96M
	Financing Cash Flow
-730.44M	-378.19M	-46.57M	-622.97M	-350.00M

Artis Real Estate Investment Technical Analysis

Technical Analysis Sentiment

Negative

Last Price7.17

Price Trends

50DMA

7.60

Negative

100DMA

7.44

Negative

200DMA

7.19

Negative

Market Momentum

MACD

0.04

Positive

RSI

55.09

Neutral

STOCH

18.11

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AX.UN, the sentiment is Negative. The current price of 7.17 is below the 20-day moving average (MA) of 7.64, below the 50-day MA of 7.60, and below the 200-day MA of 7.19, indicating a bearish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 55.09 is Neutral, neither overbought nor oversold. The STOCH value of 18.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AX.UN.

Artis Real Estate Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRU.UN	76 Outperform	C$4.20B	18.55	4.50%	7.51%	9.46%	-42.77%
AX.UN	67 Neutral	$709.39M	―	-2.86%	8.41%	-10.56%	81.41%
HR.UN	63 Neutral	C$2.55B	―	-2.29%	6.17%	-6.92%	-310.05%
Sector *	61 Neutral	$4.43B	16.13	-3.23%	11.37%	6.25%	-21.19%

* Real Estate Sector Average

Performance Comparison

TSE:AX.UN

Artis Real Estate Investment

7.17

1.19

19.90%

TSE:HR.UN

H&R Real Estate ate Staple

9.72

1.04

11.98%

TSE:SRU.UN

SmartCentres Real Estate Investment Trust

24.65

3.17

14.76%

DRETF

Dream Office Real Estate Investment

11.94

-1.42

-10.63%

BOWFF

Boardwalk REIT

44.92

-7.76

-14.73%

APYRF

Allied Properties Real Estate Investment Trust

11.03

-0.92

-7.70%

Artis Real Estate Investment Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: -5.78% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant achievements in debt reduction and asset dispositions, along with securing new credit facilities. However, challenges with the Cominar investment and the potential impact on future income and distributions were significant concerns. The sentiment is mixed, reflecting both strong financial management and ongoing strategic risks.

Highlights

Significant Debt Reduction

Artis reduced its total debt to gross book value from 50.9% at the end of 2023 to 40.2% at the end of 2024. This was achieved through a strategic disposition of assets totaling $972.9 million.

Successful Asset Dispositions

In 2024, Artis sold seven office properties, seven retail properties, one industrial property, two parking lots, and a parcel of development land in Canada, as well as 14 industrial properties and three office properties in the United States.

New Credit Facilities Secured

Artis finalized terms on new three-year senior secured credit facilities totaling $520 million, including a $350 million revolving credit facility and a $170 million non-revolving credit facility.

Net Asset Value Enhancement

Artis continues to repurchase units under its NCIB, buying 7,021,296 common units at an average price significantly below the net asset value of $13.75 per unit, thus enhancing unitholder value.

Lowlights

Cominar Investment Challenges

Artis' investment in Cominar has been negatively impacted by the interest rate environment, leading to an ongoing resolution process that may involve a discount settlement for preferred units.

Potential Income Reduction from Cominar

The equity investment in Cominar is written off, and there is no income booked from preferred investments in Q4 2024, which may affect future income and distribution sustainability.

Uncertain Income from Asset Strategy

Management acknowledges that its strategy will result in lumpy income, with the potential for reduced income affecting distribution sustainability.

Company Guidance

In the Artis Real Estate Investment Trust fourth quarter 2024 results conference call, the company highlighted several key financial metrics and strategic moves. Artis sold various properties in 2024 for a total of $972.9 million, significantly reducing its total debt to gross book value from 50.9% at the end of 2023 to 40.2% by the end of 2024. The REIT also secured new senior secured credit facilities totaling $520 million, comprising a $350 million revolving credit facility and a $170 million non-revolving credit facility. Artis renewed its Normal Course Issuer Bid (NCIB) after purchasing over 7 million common units at a substantial discount to its net asset value of $13.75 per unit. Additionally, the company is engaged in discussions to resolve its investment in Cominar, expecting a resolution that may exceed the carrying value of the junior preferred units. The management expressed a commitment to maintaining distributions despite the anticipated lumpy income from its strategic investment approach.

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.