Maintaining Hold on Simon Property Group Amid Mixed Financial Signals and Operational Challenges

Analyst Ki Bin Kim of Truist Financial maintained a Hold rating on Simon Property (SPG – Research Report), retaining the price target of $147.00.

Ki Bin Kim has given his Hold rating due to a combination of factors which include both positive and negative financial nuances associated with Simon Property Group. While the company increased its full-year 2024 funds from operations (FFO) per share guidance, the updated figure predominantly reflects the gains from a significant asset sale rather than organic growth. When excluding the one-time gain associated with the sale of its remaining interest in Authentic Brands Group, the adjusted FFO guidance falls slightly short of the consensus and Truist Securities’ estimates, suggesting a less optimistic view of the company’s core operational performance.

Furthermore, although the first quarter FFO per share exceeded expectations, this figure includes adjustments from the divestiture. When these are excluded, the FFO per share is closer to what was anticipated. Additionally, there were unexpected one-time restructuring charges that impacted the outcomes. Despite these challenges, the portfolio showed signs of stability with a year-over-year net operating income (NOI) growth and maintained occupancy rates. Kim’s Hold rating reflects a cautious approach, acknowledging the resilience of the high-income consumer base, yet tempered by the less favorable underlying financials and operational concerns.

In another report released yesterday, BMO Capital also maintained a Hold rating on the stock with a $162.00 price target.

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Simon Property (SPG) Company Description:

Simon Property Group, Inc. is a real estate investment trust, which is engaged in owning, acquiring and leasing of dining, shopping, entertainment and mixed-use destinations. Its real estate portfolio consists of Premium Outlets, shopping malls and The Mills and International Properties across North America, Europe and Asia.