Street View: Simon Property Group likely to face headwinds from higher interest expense

Simon Property

06/02/2024 13:33

** Simon Property Group  SPG.N  topped market expectations
for fourth-quarter funds from operations (FFO) on Monday, as the
commercial real estate investment trust (REIT) benefited from
strong leasing demand at its malls and shopping centers
    ** The median PT of 18 brokerages covering the stock is $144
    
    CONSERVATIVE FORECAST
    ** Piper Sandler ("overweight," PT: $172) says co has $1.5
bln in free cash flow to reinvest after dividends which is
matched by few other REIT peers, leading to a ~2% growth in
funds from operations (FFO) growth yearly
    ** Wth minimal headwinds, co should continue to earn higher
profits- Piper
    ** Jefferies ("hold," PT: $135) says weaker than expected
forecast could create pressure 
    ** Evercore ISI ("in line," PT: $142) says some of the
headwinds driving slower growth is higher interest expense from
upcoming debt refinancing and some development slowdown
near-term
    ** Adds, co forecasts "conservatively" for 2024
    ** J.P.Morgan ("neutral") notes that further monetization of
co's Other Platform Investments(OPI) in the quarter was a
"positive" as it introduces more stability into SPG's earnings
and also gives it capital to reinvest in core real-estate
    
    

 (Reporting by Priyadarshini Basu in Bengaluru)
 ((priyadarshini.basu@thomsonreuters.com))