It has been about a month since the last earnings report for Simon Property Group, Inc. (SPG - Free Report) . Shares have added about 5.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is SPG 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 catalysts.
Simon Property's Q1 FFO Beats Estimates, Guides Up
Simon Property Group reported first-quarter 2018 FFO of $2.87 per share, which surpassed the Zacks Consensus Estimate of $2.83. The FFO per share figure also came in 4.7% higher than the year-ago tally of $2.74.
Results highlight increase in base minimum rent per square foot and leasing spread per square foot at its U.S. malls and Premium Outlets. Moreover, the company recorded growth in NOI for the total portfolio that was backed by contribution from new development, redevelopment, expansion and acquisitions. Simon Property also raised its outlook for 2018.
During the quarter, the company posted revenues of around $1.4 billion, which outpaced the Zacks Consensus Estimate of $1.38 billion. It also compared favorably with the year-ago number of $1.35 billion.
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 94.6% as of Mar 31, 2018. Retailer sales per square foot came in at $641 for the trailing 12-month period, marking growth of 4.2%. Base minimum rent per square feet rose 3.2% year over year to $53.54 as of Mar 31, 2018. Further, leasing spread per square foot for the trailing 12-month period ended Mar 31, 2018, increased 12.6% to $8.45.
Total portfolio NOI growth for the reported quarter came in at 4.8%. This reflects increase in operating income from comparable properties, as well as additions from new development, redevelopment, expansion and acquisitions. Comparable-property NOI growth for the same period came in at 2.3%.
At the end of the reported quarter, Simon Property had redevelopment and expansion projects, including the addition of new anchors, in progress at 28 properties across the United States, Canada and Asia.
The company exited first-quarter 2018 with cash and cash equivalents of $367.2 million compared with nearly $1.5 billion reported at the prior-year end.
Additionally, as of Mar 31, 2018, Simon had more than $7.0 billion of liquidity. This comprised cash on hand, including its share of joint-venture cash, and available capacity under the company’s revolving credit facilities.
Moreover, the company repurchased 1,473,588 shares of its common stock during the quarter.
Simon Property raised its outlook for 2018. The company, now, projects FFO per share of $11.95-$12.05, up from the prior projections of $11.90-$12.02.
Simon Property announced a quarterly dividend of $1.95 per share, denoting an increase of 11.4% year over year. The dividend will be paid on May 31 to stockholders of record on May 17, 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to three lower.
Simon Property Group, Inc. Price and Consensus
At this time, SPG has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. Charting a somewhat similar path, 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.
The company's stock is suitable solely for momentum based on our styles scores.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions looks promising. Interestingly, SPG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.