A Fresh Look at American Assets Trust (AAT) Valuation as Analysts Forecast Lower Revenue for Q3 2025

Analysts are anticipating a considerable drop in quarterly revenue for American Assets Trust (AAT) as the company prepares to report results for the period ending September 30, 2025. The overall outlook from analysts is neutral, with little conviction in either direction heading into the earnings announcement.

See our latest analysis for American Assets Trust.

American Assets Trust’s share price has struggled to find momentum this year, with a year-to-date drop of 23.45 percent and a 1-year total shareholder return of negative 22.77 percent. This reflects how investor caution has grown as revenue expectations have softened. Despite this, its longer-term five-year total shareholder return remains positive, suggesting the company has demonstrated some resilience through market cycles.

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With expectations set low and little enthusiasm from analysts, investors now face a crucial question: is American Assets Trust an overlooked value, or is future growth already fully priced in?

Price-to-Earnings of 16.6x: Is it justified?

American Assets Trust currently trades at a price-to-earnings (P/E) ratio of 16.6x, which positions the stock as slightly more expensive than some of its global real estate peers. The last close was $19.95, with its P/E ratio placing it above the industry average and prompting debate about whether its earnings growth truly supports this valuation.

The price-to-earnings multiple is a widely recognized metric, indicating how much investors are willing to pay today for one dollar of earnings. For a Real Estate Investment Trust (REIT) like American Assets Trust, this measure matters because it helps put current profitability in the context of sector norms and future expectations.

Despite the company's price sitting at a 4.3% discount to estimated fair value, its P/E of 16.6x remains high relative to the global REITs industry average of 15.3x and significantly higher than a “fair” P/E ratio of 3.7x, as determined by regression models. This suggests the market could adjust downward if earnings growth expectations fall short, or upward if profitability outpaces projections.

Explore the SWS fair ratio for American Assets Trust

Result: Price-to-Earnings of 16.6x (OVERVALUED)

However, persistent negative net income growth and modest revenue gains could challenge expectations. This may potentially undermine arguments for a sustained valuation premium.

Find out about the key risks to this American Assets Trust narrative.

Another View: What Does Our DCF Model Say?

Looking at the SWS DCF model, American Assets Trust appears to be trading at a 4.3% discount to its estimated fair value. This approach values expected future cash flows and suggests the stock has a slight margin of safety at current prices. Are investors overlooking hidden value, or is the discount justified?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out American Assets Trust for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own American Assets Trust Narrative

If our take does not quite align with your own analysis, you can easily dive into the numbers and craft a unique perspective in just minutes: Do it your way.

A great starting point for your American Assets Trust research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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