Indianapolis-based Simon Property Group, Inc. (SPG) operates as a retail REIT focused on owning premier shopping, dining, entertainment and mixed-use destinations. Valued at $55.8 billion by market cap, Simon owns 250+ iconic properties across North America, Europe, and Asia providing community gathering places for millions of people every day.
Companies worth $10 billion or more are generally described as “large-cap stocks,” Simon fits this bill perfectly. Given the company’s extensive operations and property holdings, its valuation above this mark is unsurprising.
Simon recently touched its five-year high of $190.13 on Mar. 3 and is currently trading 13.1% below that peak. Meanwhile, SPG stock declined 7.8% over the past three months, marginally lagging behind the S&P 500 Index’s ($SPX) 7.7% drop during the same time frame.
SPG has underperformed the broader market by a small margin over the longer term as well. SPG gained 81 bps over the past six months and 9.5% over the past 52 weeks, compared to SPX’s 1.1% uptick over the past six months and 9.7% returns over the past year.
To confirm the overall uptrend and recent downturn, SPG has traded consistently above its 200-day moving average over the past year and dropped below its 50-day moving average in March.
Simon Property Group’s stock prices gained 3.3% in the trading session after the release of its impressive Q4 results on Feb. 4. Driven by solid growth in lease income, Simon’s overall revenues increased 3.6% year-over-year to approximately $1.6 billion, exceeding the Street’s expectations by 1.9%. Meanwhile, the company delivered a marginal growth in funds from operations (FFO) compared to the year-ago quarter to $1.4 billion and its FFO per share of $3.68 surpassed the consensus estimates by 8.2%, which boosted investor confidence.
Despite its solid financials, Simon Property Group underperformed its peer Realty Income Corporation’s (O) 10.6% surge over the past 52-week period.
Among the 28 analysts covering the SPG stock, the consensus rating is a “Moderate Buy.” Its mean price target of $191.17 suggests a 15.7% upside potential from current price levels.
