American Assets Trust (AAT) has released its second quarter 2026 earnings, giving investors fresh detail on sales, revenue and earnings per share as of June 30. The update also covers performance for the first half of 2026.

Despite the recent earnings update, American Assets Trust’s share price has eased, with a 7 day share price return of 5.57% and a 30 day share price return of 10.27%. However, the year to date share price return of 20.02% and 1 year total shareholder return of 28.54% still point to stronger longer term momentum than the past month suggests.

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After American Assets Trust’s strong year to date and 1 year run, the shares still trade below both analyst targets and an estimated intrinsic value. Has most of the easy upside already played out, or does value remain on the table?

Most Popular Narrative: 4.1% Undervalued

At a last close of $22.54 versus a narrative fair value of $23.50, the current pricing of American Assets Trust sits only modestly below that estimate. The small gap puts more focus on how the business story could support that fair value over time.

The analysts have a consensus price target of $23.5 for American Assets Trust based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $468.6 million, earnings will come to $34.2 million, and it would be trading on a PE ratio of 53.8x, assuming you use a discount rate of 8.0%.

That raises questions about what kind of earnings ramp and margin rebuild would need to sit behind that valuation story. The narrative leans on measured revenue growth, thicker profit margins and a rich earnings multiple that is higher than the wider REIT peer group. Investors may want to examine exactly which assumptions about future cash flow and profitability would need to hold for American Assets Trust to line up with that fair value.

Result: Fair Value of $23.50 (UNDERVALUED)

However, you should still watch for risks such as lower than expected rent growth or weaker occupancy, as these could challenge American Assets Trust’s higher margin assumptions.

Another View on American Assets Trust’s Valuation

While the fair value narrative for American Assets Trust points to a modest 4.1% discount, the current P/E of about 77x tells a different story. It sits above the fair ratio of 47.5x and above both peer and global REIT averages, which raises the question of how much short term valuation risk you are willing to take on.

Next Steps

If this mix of optimism and concern around American Assets Trust leaves you unsure, move quickly and review the data for yourself. To weigh both sides of the story in one place, take a close look at the 2 key rewards and 3 important warning signs.

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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.