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Artis Real Estate Investment (TSE:AX.UN)
TSX:AX.UN
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Artis Real Estate Investment
(TSX:AX.UN)
Rating:53Neutral
Price Target:
C$7.50
▲(3.88% Upside)
Positive Factors
Occupancy Targets
Increasing visibility on 95% occupancy target.
Outlook Upgrade
Upgrading to BUY following raised outlook for the company.
Negative Factors
Earnings Performance
Q3/24 results disappoint; near-term headwinds persist.
M&A Activity
M&A Activity Drops to Multi- ; Q1/25: Slight miss.
Artis Real Estate Investment (AX.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$698.41M
Dividend Yield8.31%
Average Volume (3M)86.45K
Price to Earnings (P/E)―
Beta (1Y)1.00
Revenue Growth-21.40%
EPS Growth71.00%
CountryCA
Employees143
SectorReal Estate
Sector Strength57
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.27
Shares Outstanding96,733,150
10 Day Avg. Volume124,814
30 Day Avg. Volume86,454
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.83
Enterprise Value/Revenue7.01
Enterprise Value/Gross Profit13.12
Enterprise Value/Ebitda28.01
Forecast
1Y Price Target
$7.25Price Target Upside0.39% Upside
Rating ConsensusHold
Number of Analyst Covering2
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 generates revenue primarily through rental income derived from its diverse portfolio of properties. The company leases its commercial, industrial, and retail spaces to a wide range of tenants, which provides a steady cash flow. Additionally, Artis may realize income through property management fees and service charges related to the maintenance and operation of its properties. The trust also benefits from strategic partnerships and joint ventures that enhance its operational capabilities and market reach. By actively managing its property portfolio and optimizing occupancy rates, Artis maximizes its revenue potential while focusing on long-term value creation for its investors.
Artis Real Estate Investment Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: -1.50%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced performance for Artis REIT. While there were significant achievements such as increased occupancy and successful property dispositions contributing to deleveraging, challenges such as elevated payout ratios and increased debt utilization indicate areas of concern. The sentiment remains cautious as the company navigates strategic reviews and market conditions.Q2-2025 Updates
Positive Updates
Increase in Occupancy Rates
Occupancy rose to 87.8% as of June 30, up from 87.1% at March 31, driven by leasing activities including a new 80,600 square foot lease in the U.S. industrial portfolio.
Successful Property Dispositions
Artis closed on the sale of a Canadian retail property for $4.8 million and went unconditional on the sale of a 90% interest in U.S. development land for USD 11.3 million, aiding in deleveraging efforts.
Deleveraging and Balance Sheet Strengthening
Debt to gross book value stood at 41.1% compared to 40.2% at the most recent year-end, reflecting efforts to reduce leverage and strengthen liquidity.
Unit Repurchase Program
Repurchased 3.8 million common units at an average price of $7.42, reflecting confidence in the intrinsic value of the business.
Negative Updates
Elevated Payout Ratios
Payout ratios were elevated, indicating potential concerns about the sustainability of distributions in the short term.
Increased Debt Utilization
Drew a net of $232.6 million on revolving credit facilities primarily to repay $200 million Series E senior unsecured debentures, increasing reliance on credit facilities.
Challenges in Strategic Review
Ongoing strategic review costs were incurred, indicating ongoing indecision or challenges in capital allocation and strategic options.
Company Guidance
During the Artis Real Estate Investment Trust Second Quarter 2025 Results Conference Call, the company provided detailed financial guidance and strategic insights. Artis REIT reported an occupancy increase to 87.8% as of June 30, 2025, up from 87.1% at the end of March, driven by a new 80,600 square foot lease in their U.S. industrial portfolio. They completed 210,643 square feet of renewals with rental rates rising by 3.6%. The company emphasized its focus on deleveraging, closing the sale of a Canadian retail property for $4.8 million and going unconditional on a U.S. land parcel sale for USD 11.3 million. Their debt to gross book value was at 41.1%, while net asset value per unit stood at $12.98. During the quarter, Artis drew a net of $232.6 million on their credit facilities to repay maturing debentures, with $271.6 million drawn on the revolving facility and $170 million on the non-revolving facility. The call highlighted their commitment to reducing leverage, managing mortgage maturities, and engaging in strategic unit repurchases under their NCIB, acquiring 1.77 million common units at $7.28 each. Additionally, Artis is exploring strategic options for the Cominar portfolio, with discussions ongoing and an optimistic outlook for resolution by year-end.Artis Real Estate Investment Financial Statement Overview
Summary
Artis Real Estate Investment shows a mixed financial position. While operational cash flows are stable and leverage is manageable, persistently negative net income and declining revenue are concerning. The company needs to focus on reversing revenue contraction and improving profitability to enhance its financial health.Income Statement
The income statement shows declining revenue over recent years, with a revenue drop from $458.9M in 2020 to $282.3M in TTM. Gross profit margin for TTM is 53.4%, which is respectable. However, the net profit margin is negative at -10.2% due to consistent net losses, indicating profitability challenges. The EBITDA margin is 25.0%, suggesting moderate operational efficiency, but the overall trend reflects a need for revenue stabilization and cost management.45
Neutral
Balance Sheet
The balance sheet is reasonably strong with a debt-to-equity ratio of 0.68 in TTM, indicating a balanced leverage. However, total assets have decreased from $4.9B in 2020 to $2.7B in TTM. The equity ratio stands at 57.5%, which is healthy and suggests a solid capital structure. Despite asset shrinkage, the company maintains a stable equity position.65
Positive
Cash Flow
Cash flow analysis reveals a stable operating cash flow with $79.7M in TTM, and free cash flow remains positive. However, there is a significant negative financing cash flow driven by high debt repayments, indicating potential liquidity pressures. The operating cash flow to net income ratio is negative due to net losses, suggesting difficulties translating cash operations into profits.55
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
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 |
| EBITDA | 53.88M | -217.19M | 294.89M | 232.92M | 265.09M |
| Net Income | -47.41M | -332.07M | -5.29M | 389.18M | 21.54M |
Balance Sheet | |||||
| Total Assets | 2.80B | 3.74B | 4.55B | 4.58B | 4.86B |
| Cash, Cash Equivalents and Short-Term Investments | 32.79M | 28.94M | 29.17M | 221.47M | 34.70M |
| Total Debt | 1.13B | 1.91B | 2.21B | 1.97B | 2.40B |
| 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
Negative
7.22
Price Trends
7.46
Negative
7.28
Negative
7.26
Negative
Market Momentum
-0.04
Positive
30.56
Neutral
9.66
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 7.22 is below the 20-day moving average (MA) of 7.54, below the 50-day MA of 7.46, and below the 200-day MA of 7.26, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 30.56 is Neutral, neither overbought nor oversold. The STOCH value of 9.66 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$317.77M | 8.37 | 7.80% | 8.62% | 1.59% | 19.74% | |
73 Outperform | C$371.58M | 13.05 | 5.68% | 7.79% | -1.07% | 684.07% | |
66 Neutral | C$2.73B | ― | -0.21% | 6.05% | 6.86% | 92.60% | |
64 Neutral | C$1.99B | 4.76 | -0.88% | 5.24% | 2.53% | -62.52% | |
59 Neutral | C$3.05B | ― | -3.89% | 6.40% | -6.43% | -35204.55% | |
53 Neutral | $698.41M | ― | -3.37% | 8.31% | -21.40% | 71.00% | |
48 Neutral | C$375.61M | ― | -3.72% | 4.30% | -2.90% | 68.88% |
* Real Estate Sector Average
Performance Comparison
TSE:AX.UN
Artis Real Estate Investment
7.22
1.12
18.28%
TSE:BTB.UN
BTB REIT
3.60
0.68
23.29%
TSE:CRR.UN
Crombie Real Estate ate
14.71
1.77
13.68%
TSE:HR.UN
H&R Real Estate ate Staple
11.60
2.65
29.61%
TSE:MRT.UN
Morguard Real Estate ate
5.75
0.65
12.75%
TSE:PRV.UN
PRO Real Estate Investment
5.78
1.09
23.24%
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.