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

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Artis Real Estate Investment

(TSX:AX.UN)

Rating:55Neutral

Price Target:

C$7.50

▲(1.49% Upside)

Artis Real Estate Investment's overall score is primarily influenced by its financial performance, which is challenged by declining revenues and net losses. The earnings call provided some positive developments in occupancy and deleveraging, but risks remain with elevated payout ratios and increased debt levels. Technical analysis shows a neutral trend, while valuation metrics highlight potential income but also risk.

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

$706.27M

Dividend Yield8.12%

Average Volume (3M)115.31K

Price to Earnings (P/E)―

Beta (1Y)1.00

Revenue Growth-21.40%

EPS Growth71.00%

CountryCA

Employees143

SectorReal Estate

Sector Strength53

IndustryREIT - Diversified

Share Statistics

EPS (TTM)-0.27

Shares Outstanding96,617,290

10 Day Avg. Volume134,686

30 Day Avg. Volume115,305

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap2.80

Enterprise Value/Revenue7.71

Enterprise Value/Gross Profit14.81

Enterprise Value/Ebitda86.75

Forecast

1Y Price Target

$7.48

Price Target Upside1.27% Upside

Rating ConsensusHold

Number of Analyst Covering0

Artis Real Estate Investment Business Overview & Revenue Model

Company DescriptionArtis Real Estate Investment Trust (AX.UN) is a diversified real estate investment trust based in Canada, primarily focused on acquiring, developing, and managing income-producing properties across various sectors, including commercial, industrial, and retail real estate. The trust aims to provide long-term growth and income to its unitholders through a strategic portfolio that spans multiple markets and asset classes, ensuring stability and resilience against market fluctuations.

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: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a stable and strategically productive quarter with positive developments in leasing, occupancy, and deleveraging. However, challenges such as elevated payout ratios, increased debt to gross book value, and strategic review costs remain. The company is actively managing these challenges while exploring growth opportunities.

Q2-2025 Updates

Positive Updates

Increased Occupancy Rates

Occupancy rates rose to 87.8% as of June 30 from 87.1% at March 31, driven by a new 80,600 square foot lease in the U.S. industrial portfolio.

Successful Lease Renewals

210,643 square feet of renewals commenced during the quarter with rental rates increasing by 3.6%, indicating strong tenant relationships and asset strength.

Deleveraging Initiatives

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, contributing to deleveraging efforts.

Repurchase of Common Units

Repurchased 1.77 million common units at an average price of $7.28, along with 25,700 Series E and 33,200 Series I preferred units, totaling 3.8 million common units repurchased at an average price of $7.42.

Negative Updates

Elevated Payout Ratios

Payout ratios were elevated, and income metrics like FFO and AFFO may fluctuate quarter-to-quarter.

Increased Debt to Gross Book Value

Debt to gross book value increased to 41.1% as of June 30, compared to 40.2% at the most recent year-end.

Strategic Review Costs

Incurred strategic review costs in G&A due to ongoing capital allocation explorations.

Company Guidance

During the second quarter of 2025, Artis Real Estate Investment Trust focused on reducing leverage and strengthening its balance sheet, aiming to maximize long-term value for its unitholders. Occupancy levels increased to 87.8%, up from 87.1% in the previous quarter, driven by the commencement of a new 80,600 square foot lease and 210,643 square feet of renewals with rental rates rising by 3.6%. The company closed 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. Debt to gross book value was at 41.1% as of June 30, 2025. The net asset value per unit stood at $12.98, reflecting impacts from foreign exchange, distributions, credit loss provisions, and fair value adjustments. Artis repurchased 1.77 million common units at an average price of $7.28 and continued to actively manage upcoming mortgage maturities. The company is exploring strategic options for the Cominar portfolio, with discussions progressing and a resolution expected 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

Neutral

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.

Balance Sheet

Positive

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.

Cash Flow

Neutral

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	256.60M	300.37M	335.84M	372.51M	419.50M	458.92M
Gross Profit	133.68M	163.23M	184.02M	209.98M	237.78M	269.27M
EBITDA	22.82M	53.88M	-217.19M	294.89M	232.92M	265.09M
Net Income	-53.12M	-47.41M	-332.07M	-5.29M	389.18M	21.54M
Balance Sheet
Total Assets	2.61B	2.80B	3.74B	4.55B	4.58B	4.86B
Cash, Cash Equivalents and Short-Term Investments	16.64M	32.79M	28.94M	29.17M	221.47M	34.70M
Total Debt	1.08B	1.13B	1.91B	2.21B	1.97B	2.40B
Total Liabilities	1.16B	1.22B	2.02B	2.32B	2.12B	2.53B
Stockholders Equity	1.46B	1.58B	1.72B	2.23B	2.46B	2.33B
Cash Flow
Free Cash Flow	79.68M	79.73M	79.59M	140.72M	202.28M	176.31M
Operating Cash Flow	79.68M	80.14M	79.96M	140.74M	202.29M	176.33M
Investing Cash Flow	548.08M	652.11M	298.39M	-288.99M	607.47M	165.96M
Financing Cash Flow	-636.79M	-730.44M	-378.19M	-46.57M	-622.97M	-350.00M

Artis Real Estate Investment Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.39

Price Trends

50DMA

7.38

Negative

100DMA

7.23

Positive

200DMA

7.19

Positive

Market Momentum

MACD

-0.03

Negative

RSI

54.34

Neutral

STOCH

67.95

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AX.UN, the sentiment is Positive. The current price of 7.39 is above the 20-day moving average (MA) of 7.19, above the 50-day MA of 7.38, and above the 200-day MA of 7.19, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.34 is Neutral, neither overbought nor oversold. The STOCH value of 67.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AX.UN.

Artis Real Estate Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRV.UN	79 Outperform	C$389.10M	13.82	5.27%	7.67%	-0.28%	206.65%
BTB.UN	76 Outperform	C$331.01M	8.58	7.80%	8.18%	1.59%	19.74%
CRR.UN	69 Neutral	C$2.79B	―	-0.21%	5.88%	6.86%	92.60%
AX.UN	55 Neutral	$706.27M	―	-3.37%	8.12%	-21.40%	71.00%
HR.UN	55 Neutral	C$3.14B	―	-1.99%	6.13%	-5.67%	54.92%
Sector *	53 Neutral	$1.21B	3.22	-6.08%	5.78%	-8.30%	-81.83%
MRT.UN	51 Neutral	C$376.04M	―	-3.72%	4.29%	-2.90%	68.88%

* Real Estate Sector Average

Performance Comparison

TSE:AX.UN

Artis Real Estate Investment

7.39

0.42

6.10%

TSE:BTB.UN

BTB REIT

3.78

0.68

21.94%

TSE:CRR.UN

Crombie Real Estate ate

15.15

0.82

5.72%

TSE:HR.UN

H&R Real Estate ate Staple

12.10

2.08

20.76%

TSE:MRT.UN

Morguard Real Estate ate

5.76

0.64

12.50%

TSE:PRV.UN

PRO Real Estate Investment

5.87

0.79

15.55%

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: Sep 04, 2025