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Research Alert: CFRA Reiterates Hold Opinion On Shares Of Simon Property Group, Inc.

05/11/2021 12:14

04:00 PM EDT, 05/11/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our target price by $18 to $128, equal to 13.1x our 2021 FFO per share estimate which we raise by $0.15 to $9.75 and maintain 2022 at $10.00. SPG reported Q1 FFO per share of $2.48 vs. $2.78, $0.22 above consensus. Occupancy as of March 31 stood at 90.8%, well below the 94.0% level a year ago and down 50 bps from the prior quarter. SPG confirmed occupancy would not be going back to the pre-pandemic levels (2019) until 2022 or even 2023. We think investors may be underestimating this; shares have been bid back up on reopening news momentum but we see SPG facing the same mall problems before Covid-19 such as beleaguered anchor stores and apparel tenants. SPG noted the brands it has acquired have been performing above plans but stores like J.C. Penney are still in the stabilization mode. We also worry about increasing short-term leases in the portfolio and if SPG will be able to convert these to longer term leases at higher rates in the future. Tenant sales have risen to 8% below pre-pandemic levels.