Truist Financial analyst Ki Bin Kim has maintained their neutral stance on SPG stock, giving a Hold rating on January 29.
Geoff Meacham has given his Hold rating due to a combination of factors impacting Simon Property Group’s financial outlook. The company has demonstrated a solid quarter operationally and has provided a promising operating guidance for 2024, with expectations of at least 3% growth in domestic property net operating income (NOI). Simon Property Group has also shown strong leasing demand, and Meacham notes the potential rental upside from newly signed rents at $74 per square foot and renewal rents at $65 per square foot, compared to the expiring inline rent of $55 per square foot. However, Meacham suggests that investors should consider the mix dynamics and the shift from overage rent to higher fixed rent when evaluating this potential NOI upside.
Despite these positive indicators, Simon Property Group’s funds from operations (FFO) per share guidance for 2024 is slightly below the expectations of Truist Securities and the consensus, with a reported figure of $11.975 per share against the anticipated $12.15 and $12.20 per share, respectively. This 1.8% miss is attributed partly to a conservative estimate regarding the increase in interest expense, which is higher than Meacham’s projection. After discussions with management, it appears that the discrepancy from the consensus may be due to higher-than-anticipated NOI estimates and several other factors that have not been disclosed in this summary. Meacham thus maintains a Hold rating, balancing the solid operational performance against the slightly conservative financial guidance for the upcoming year.
In another report released on January 29, Scotiabank also maintained a Hold rating on the stock with a $142.00 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.
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