Simon Property Group, Inc. (SPG) is a leading real estate investment trust (REIT) with a market cap of $52.8 billion, specializing in high-quality retail and mixed-use properties. The Indianapolis, Indiana-based company manages a diverse portfolio that includes malls, premium outlets, and international properties.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Simon Property fits this criterion perfectly. Simon Property is renowned for being the largest owner of shopping malls in the United States and holds interests in 230 properties across North America, Asia, and Europe.
However, the shopping mall REIT has declined 4.3% from its 52-week high of $169.18. Shares of SPG are up 6.7% over the past three months, underperforming The Real Estate Select Sector SPDR Fund's (XLRE) 16.3% return in the same period.
However, in the longer term, shares of SPG have risen 13.5% on a YTD basis, outpacing XLRE's 10.2% gain. Additionally, over the past 52 weeks, SPG's shares have climbed 41.3%, compared to XLRE’s return of 20.6%.
SPG has been in a bullish trend, trading above its 200-day and 50-day moving averages since November last year despite some fluctuations.
Simon Property has outperformed over the past year due to its high-quality portfolio featuring premium tenants and Veblen goods retailers, which enhances its demand and pricing power. Moreover, despite missing Q2 funds from operations (FFO) estimates on Aug. 5, the stock surged 5.1% the following day due to its stronger-than-expected revenue of $1.5 billion and an upward revision of the lower end of its annual FFO forecast.
Yet, its rival, Vornado Realty Trust (VNO), has seen an 18.1% rise on a YTD basis, outperforming Simon Property, but VNO's 32.4% gain over the past 52 weeks lags behind SPG's performance during the same period.
Despite SPG’s relative outperformance over the past year, analysts are cautiously optimistic about the stock's prospects. The stock has a consensus rating of “Moderate Buy” from the 17 analysts covering it, and the mean price target of $164.50 suggests a premium of only 1.6% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
