Simon Property Bids Up on Broker Action
INDIANAPOLIS (
) --
Simon Property Group
(SPG) - Get Report
shares jumped in premarket trading Monday after the U.S. mall owner's shares received an upgrade.
Early Monday analysts from Jefferies upgraded Simon Property Group shares to buy, from hold, and set a price target of $120.
|
Simon Property shares bid 1.6% higher ahead of the opening bell.
Last week analysts from RBC Capital Markets reiterated a top pick rating on Simon Property shares, and raised their price target on the stock by $5 to $115. A day earlier, Barclays Capital analysts reiterated an overweight rating on the stock, raising their price target by $3 to $107. And Deutsche Bank analysts reiterated their buy rating on the stock, upping their price target by $9 to $114.
Bucking the trend were analysts from Hilliard Lyons who downgraded Simon Property last week to neutral, from long-term buy.
Simon Property posted better-than-expected third-quarter earnings last week and
increased its dividend.
"It increased guidance," noted Sandler O'Neill analyst Alexander Goldfarb. "We saw a very hefty growth of the dividend, which is constant with Simon, a very good, well-oiled machine."
Simon Property's improved performance was due in part to a 10.6% year-over-year increase in sales by the
real estate investment trust's mall tenants.
Mall-owning REIT peers
General Growth Properties
(GGP)
and
Taubman Centers
(TCO) - Get Report
also recently reported that their shopping center tenants enjoyed double-digit sales gains in the recent quarter.
>>REIT Earnings: Behind the Numbers
Simon Property raised its quarterly dividend by 33% to 80 cents per share. The new payout will be available Nov. 30 to shareholders of record on Nov. 16.
The mall owner updated its guidance for 2010 and now expects to post full-year adjusted funds from operations in a range of $5.90 to $5.95 per share, increasing the high end of its prior estimate by 8 cents per share. Funds from operations, or FFO, is a performance figure used by REITs to define cash flow from operations.
Earlier this year
Simon Property failed in its attempts to acquire fellow mall owner General Growth Properties.
>>Simon Property Drops General Growth Bid
Simon had been in a bidding war with
Brookfield Asset Management
(BAM) - Get Report
for General Growth as the acquisition target headed into bankruptcy.
Simon's final offer valued General Growth at $6.5 billion, or $20 per share. It had also offered a recapitalization plan for General Growth at $11 a share, in which it would have bought 227.3 million shares for a total of $2.5 billion.
Brookfield and its investment partners offered an additional $500 million in equity to a $7 billion offer and agreed to the issue of warrants -- which Simon had refused to agree to -- to be issued over time, with only 40% due immediately on the bankruptcy court resolution.
General Growth said it expects to emerge from bankruptcy on or around Nov. 8th.
-- Written by Miriam Marcus Reimer in New York.
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