SPG - Embedded Expectations Analysis - 2021 08 05
Simon Property Group, Inc. (SPG:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 29.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about mall and outlet occupancy rates, retail space demand, and online retail trends.Specifically, management may have concerns about declining mall and outlet occupancy rates, the sustainability of demand for retail space, and the mix between online and in-store retailers. In addition, they may lack confidence in their ability to improve occupancy rates in 2021, achieve performance targets in Europe, and bring new merchandise brands into their JCPenney investment. Also, management may have concerns about declining net operating income, an increase in lower rent paying temporary tenants in the portfolio, and the impact of increased online store pick-up and in-store shipping trends. Finally, they may lack confidence in their ability to execute development and redevelopment projects.
Simon Property Group operates as a self-administered and self-managed real estate investment trust. Simon Property Group, L.P. is the company's majority-owned Delaware partnership subsidiary that owns all of its real estate properties and other assets. The company owns, develops and manages shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets?, and The Mills? in United States as well as internationally including Puerto Rico, Asia, Europe and Canada. The company also owned equity stake in Klepierre SA, a Paris-based real estate company, which owns, or has an interest in, shopping centers in Europe.
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