The analyst firm set a price target of $205 for the mall operator. Credit Suisse analysts said that Simon Property has a top quality retail portfolio, a deep and talented management team, a strong balance sheet, and an impressive redevelopment pipeline.
"We expect that SPG's Klepierre investment will continue to appreciate in value as European cap rates contract in a low interest rate environment," Credit Suisse analysts wrote. "While the investment is relatively small for SPG ($2bn), we expect that positive asset pricing trends will prove a net positive for the company over time."
Separately, TheStreet Ratings team rates SIMON PROPERTY GROUP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIMON PROPERTY GROUP INC (SPG) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.7%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SIMON PROPERTY GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for SIMON PROPERTY GROUP INC is rather high; currently it is at 51.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.59% trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SIMON PROPERTY GROUP INC's earnings per share declined by 9.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SIMON PROPERTY GROUP INC reported lower earnings of $3.86 versus $4.74 in the prior year. This year, the market expects an improvement in earnings ($4.58 versus $3.86).
- You can view the full analysis from the report here: SPG Ratings Report