AAT
American Assets Trust, Inc.
$22.89
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 59.5% below fair value
You pay
$22.89
Bear
$46.67
Fair
$56.47
Bull
$66.26
Bear
$46.67
+103.9%
$3.24 FFO × 18x
Fair
$56.47
+146.7%
$3.24 FFO × 22x
Bull
$66.26
+189.5%
$3.24 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($3.24) × diversified P/FFO multiple
Implied Market Multiple
7.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$18.00
Divergence from AlphaVal
214%
Summary
At $3.24 FFO/share with a 22x diversified REIT multiple, the base-case value is $56.47 per share. Dividend yield: 5.9%. DDM cross-check: $21.37.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 5.9% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $21.37 (62% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $18.00 (from 11 analysts). Our estimate is 214% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify