In a report released today, Ronald Kamdem from Morgan Stanley maintained a Hold rating on American Assets (AAT – Research Report), with a price target of $24.00.
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Ronald Kamdem has given his Hold rating due to a combination of factors affecting American Assets Trust. The company’s recent financial performance showed a mixed picture; while the fourth quarter funds from operations (FFO) exceeded expectations, the year-over-year decline was impacted by increased interest expenses and lower office occupancy rates. Positive contributions from retail and multifamily segments, driven by higher occupancy and rent levels, were notable, but they were offset by these challenges.
Looking forward, the FY25 earnings guidance fell short of consensus estimates, suggesting potential headwinds. The company faces uncertainties, particularly with the planned sale of the Del Monte center and the leasing pipeline, which may influence leverage levels by the end of 2025. Overall, these mixed signals and uncertainties around future performance led to the decision to rate the stock as Hold, reflecting a cautious outlook amidst the potential risks and opportunities.