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Simon Property (SPG) Up 11.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Simon Property (SPG - Free Report) . Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Simon Property due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Simon Property Tops Q3 FFO Estimates, Raises 2023 Outlook
Simon Property’s third-quarter 2023 FFO per share of $3.20 surpassed the Zacks Consensus Estimate of $2.98. Also, the figure increased 9.2% year over year.
Results reflected better-than-anticipated revenues on healthy leasing activity and a rise in the base rent per square foot and occupancy levels. However, higher property operating expenses and interest expenses partly offset the upsides. However, this retail behemoth raised its 2023 FFO per share outlook.
Simon Property generated revenues of $1.41 billion in the quarter, surpassing the Zacks Consensus Estimate of $1.37 billion. The reported figure increased 7.2% year over year.
Behind the Headlines
SPG reported revenues from lease income of nearly $1.3 billion, 6.9% higher than the prior-year period’s figure. Our estimate was pegged at $1.22 billion.
As of Sep 30, 2023, the occupancy for the U.S. Malls and Premium Outlets portfolio was 95.2%, up 70 basis points from 94.5% as of Sep 30, 2022. We projected the metric to be 94.9%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $56.41 as of Sep 30, 2023, rising from $54.80 as of Sep 30, 2022, reflecting an increase of 2.9%. Our estimate was pegged at $56.42.
Simon Property’s property operating expenses in the third quarter were $136.5 million, increasing 13% from the prior-year quarter. The domestic property net operating income (NOI) increased 4.2% year over year, and the portfolio NOI ascended 4.3%.
Moreover, quarterly interest expenses of $212.2 million marked an increase of 13% year over year. Our estimate was pegged at $201.5 billion.
In the quarter, construction started for Jakarta Premium Outlets, which is set to become the first Premium Outlet Center in Indonesia. This upscale outlet, spanning 300,000 square feet, is scheduled to welcome its first customers in February 2025. Simon has a 50% ownership stake in this endeavor. Moreover, construction is underway for redevelopment and expansion projects at various properties in North America and Asia.
Balance Sheet Position
Simon Property exited the third quarter of 2023 with $8.8 billion of liquidity. This comprised $1.4 billion of cash in hand, including its share of joint-venture cash, and $7.4 billion of available capacity under the company’s revolving credit facilities.
During the third quarter, SPG repurchased 1.27 million shares of its common stock.
2023 Outlook Raised
For 2023, Simon Property now projects FFO per share to be in the range of $12.15-$12.25, up from the prior-guided range of $11.85-$11.95. This marks an increase of 30 cents per share at the midpoint.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Simon Property has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Simon Property has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Simon Property is part of the Zacks REIT and Equity Trust - Retail industry. Over the past month, Kimco Realty (KIM - Free Report) , a stock from the same industry, has gained 5.7%. The company reported its results for the quarter ended September 2023 more than a month ago.
Kimco Realty reported revenues of $446.07 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $0.18 for the same period compares with $0.41 a year ago.
Kimco Realty is expected to post earnings of $0.39 per share for the current quarter, representing a year-over-year change of +2.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.5%.
Kimco Realty has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Simon Property (SPG) Up 11.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Simon Property (SPG - Free Report) . Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Simon Property due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Simon Property Tops Q3 FFO Estimates, Raises 2023 Outlook
Simon Property’s third-quarter 2023 FFO per share of $3.20 surpassed the Zacks Consensus Estimate of $2.98. Also, the figure increased 9.2% year over year.
Results reflected better-than-anticipated revenues on healthy leasing activity and a rise in the base rent per square foot and occupancy levels. However, higher property operating expenses and interest expenses partly offset the upsides. However, this retail behemoth raised its 2023 FFO per share outlook.
Simon Property generated revenues of $1.41 billion in the quarter, surpassing the Zacks Consensus Estimate of $1.37 billion. The reported figure increased 7.2% year over year.
Behind the Headlines
SPG reported revenues from lease income of nearly $1.3 billion, 6.9% higher than the prior-year period’s figure. Our estimate was pegged at $1.22 billion.
As of Sep 30, 2023, the occupancy for the U.S. Malls and Premium Outlets portfolio was 95.2%, up 70 basis points from 94.5% as of Sep 30, 2022. We projected the metric to be 94.9%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $56.41 as of Sep 30, 2023, rising from $54.80 as of Sep 30, 2022, reflecting an increase of 2.9%. Our estimate was pegged at $56.42.
Simon Property’s property operating expenses in the third quarter were $136.5 million, increasing 13% from the prior-year quarter. The domestic property net operating income (NOI) increased 4.2% year over year, and the portfolio NOI ascended 4.3%.
Moreover, quarterly interest expenses of $212.2 million marked an increase of 13% year over year. Our estimate was pegged at $201.5 billion.
In the quarter, construction started for Jakarta Premium Outlets, which is set to become the first Premium Outlet Center in Indonesia. This upscale outlet, spanning 300,000 square feet, is scheduled to welcome its first customers in February 2025. Simon has a 50% ownership stake in this endeavor. Moreover, construction is underway for redevelopment and expansion projects at various properties in North America and Asia.
Balance Sheet Position
Simon Property exited the third quarter of 2023 with $8.8 billion of liquidity. This comprised $1.4 billion of cash in hand, including its share of joint-venture cash, and $7.4 billion of available capacity under the company’s revolving credit facilities.
During the third quarter, SPG repurchased 1.27 million shares of its common stock.
2023 Outlook Raised
For 2023, Simon Property now projects FFO per share to be in the range of $12.15-$12.25, up from the prior-guided range of $11.85-$11.95. This marks an increase of 30 cents per share at the midpoint.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Simon Property has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Simon Property has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Simon Property is part of the Zacks REIT and Equity Trust - Retail industry. Over the past month, Kimco Realty (KIM - Free Report) , a stock from the same industry, has gained 5.7%. The company reported its results for the quarter ended September 2023 more than a month ago.
Kimco Realty reported revenues of $446.07 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $0.18 for the same period compares with $0.41 a year ago.
Kimco Realty is expected to post earnings of $0.39 per share for the current quarter, representing a year-over-year change of +2.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.5%.
Kimco Realty has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.