Back to top

Analyst Blog

Recently, Fitch Ratings affirmed Simon Property Group Inc.’s (SPG - Analyst Report) and its operating partnership, Simon Property Group L.P.’s Issuer Default Rating (IDR) at 'A-' with a “Stable” outlook.

The rating affirmation is justified by Simon’s resilient cash flow from its sufficiently large, superior quality mall and premium outlet portfolio coupled with interests in other retail real estate. This, in turn, fortifies a fixed-charge coverage ratio suitable for the 'A-' rating.

In addition, Simon’s ratings reflect a solid management team and accessibility to multiple sources of capital. While leverage remains high of late, it is anticipated to remain in line with the requirement for 'A-' IDR for a large capitalization retail real estate investment trust (REIT).

However, Simon’s increasing development pipeline heightens its risk, though it is partly offset by sufficient liquidity coverage. As a matter of fact, Simon’s keenness for large purchases leads to a deterioration in its debt metrics in the short-term.

In Conclusion

The rating affirmation of Simon at 'A-' IDR is encouraging. In fact, this plays a major role in preserving investor confidence in the stock and helps boost its creditworthiness in the market.

This largest publicly traded REIT boasts a diversified retail portfolio and its tenant roster consists of names like The Gap Inc. (GPS - Analyst Report), Limited Brands Inc. and Abercrombie & Fitch Co. (ANF - Analyst Report). The diversification helps it endure the continuously changing retailer landscape.

Therefore, with strong fundamentals, robust growth projections, and a healthy dividend yield, Simon Property offers an enticing upside potential going forward. Moreover, Simon Property currently retains a Zacks Rank #2 (Buy). We also have a long-term Outperform recommendation on the stock.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%