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Investing.com - Piper Sandler has reiterated its Overweight rating on Simon Property Group (NYSE:SPG), citing expectations for better-than-consensus holiday sales. The $62.24B market cap retail REIT currently trades at $165.04, with InvestingPro data showing 2 analysts recently revising their earnings estimates upward for the upcoming period.
The research firm believes retailers will stock "near-full shelves" for the upcoming holiday season as economic growth continues and stores aim to avoid inventory shortages for shoppers.
Piper Sandler noted that Simon Property Group had previously guided to the midpoint of its financial guidance during first quarter 2025 earnings, primarily due to tariff uncertainty and its potential impact on percentage rent thresholds.
Despite these earlier conservative projections, the firm now sees potential upside to Simon’s funds from operations (FFO) given what it describes as an "improved backdrop" for the retail environment.
The positive outlook follows observations Piper Sandler had previously shared in its NAREIT (National Association of Real Estate Investment Trusts) note, reinforcing its confidence in Simon Property Group’s performance heading into the second quarter of 2025.
In other recent news, Simon Property Group has acquired Swire Properties’ stake in the retail and parking components of Miami’s Brickell City Centre. This acquisition transitions Simon from a 25% non-managing interest to full ownership and management of the asset, though the financial terms were not disclosed. Meanwhile, Barclays (LON:BARC) initiated coverage of Simon Property Group with an Equalweight rating, citing concerns about tariff uncertainties affecting the apparel-dominated mall sector. Citi also adjusted its price target for Simon Property Group, lowering it to $170 from $185, reflecting reduced funds from operations estimates due to first-quarter investment losses and broader economic concerns.
Jefferies, on the other hand, raised its price target for Simon Property Group to $178, maintaining a Buy rating and expressing optimism about the company’s future earnings potential. The firm adjusted its earnings forecasts, noting a non-core miss in the first quarter but projecting better net operating income growth for 2026. Stifel reaffirmed its Buy rating with a price target of $180, highlighting Simon Property Group’s maintained guidance for 2025 Real Estate Funds From Operations. The guidance aligns with consensus expectations, despite macroeconomic uncertainties and increased net interest expenses. Simon’s involvement in Catalyst Brands, a merger of JCPenney and SPARC Group, is anticipated to bring cost savings and synergies, although no guidance for Operating Partnership Income is currently provided.
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