Last Update 15 Dec 25

SPG: Future Performance Will Reflect Redevelopment Progress And Measured Premium Mall Expansion

Analysts have nudged their consolidated price target for Simon Property Group modestly higher, with multiple firms lifting estimates in the roughly $6 to $10 per share range to reflect strong Q3 REIT earnings, updated sector models, and improved expectations following recent capital markets activity and transactions.

Analyst Commentary

Recent Street research reflects a generally constructive outlook on Simon Property Group, with several bullish analysts lifting price targets into the high $180s to low $200s range as they refresh sector models following Q3 results and capital markets activity.

Target hikes into the $186 to $210 band suggest that analysts see room for further upside as the company executes on redevelopment projects, manages its balance sheet, and benefits from a stronger than expected earnings backdrop for U.S. REITs.

However, the predominance of Equal Weight and Sector Perform ratings alongside the Buy and Overweight calls indicates that some market participants remain more measured on the risk reward, particularly around valuation and macro sensitivity.

Bullish Takeaways

Bullish analysts point to a robust Q3 earnings season for U.S. REITs, with a high beat rate, as reinforcing confidence in Simon Property Group's earnings durability and supporting higher valuation multiples.
Multiple upward target revisions into the $200 plus range reflect optimism that recent capital markets activity and transactions can enhance long term growth, cash flow visibility, and balance sheet flexibility.
Model updates across the coverage universe, including refinements to out year forecasts, indicate improving expectations for rent growth, occupancy, and redevelopment returns, which underpin higher net asset value estimates.
The persistence of Buy and Overweight ratings suggests that a subset of the Street believes current pricing does not fully discount Simon Property Group's scale, high quality assets, and potential to compound earnings over time.

Bearish Takeaways

Bearish analysts, or those maintaining more neutral stances, continue to see the shares as fairly valued near term, with Equal Weight and Sector Perform ratings signaling limited margin of safety at current levels.
Some caution that, despite strong sector earnings, broader macro and rate volatility could still pressure mall traffic, retailer health, and cap rates, which would constrain multiple expansion.
There is ongoing concern that incremental growth may rely heavily on successful execution of redevelopment and capital recycling, leaving less room for missteps in project timelines and return assumptions.
While targets are moving higher, the step ups in many cases are incremental, suggesting that some on the Street view the recent fundamental strength as largely reflected in existing valuations rather than a catalyst for a major re rating.

What's in the News

Announced the acquisition of Phillips Place, a 134,000 square foot open air retail center in Charlotte's SouthPark neighborhood, along with its adjacent 180 plus room hotel and residential components, with plans for ongoing investment and merchandising upgrades (Business Expansions).
Unveiled Sagefield, a 100 acre mixed use luxury lifestyle destination in Williamson County featuring first to market boutiques, farm to table dining, entertainment venues, wellness concepts, and extensive green space, in partnership with AJ Capital Partners and hospitality partner Sam Fox (Product Related Announcements).
Issued 2025 earnings guidance, projecting net income attributable to common stockholders per diluted share in the range of 6.74 to 6.84 dollars, providing investors with a forward earnings framework (Corporate Guidance: New/Confirmed).
Raised the quarterly common stock dividend to 2.20 dollars per share for Q4 2025, a 4.8% year over year increase, payable December 31, 2025 to shareholders of record on December 10, 2025 (Dividend Increases).
Highlighted as a key partner in multiple Retail as a Service and experiential retail initiatives, including Leap enabled Bombas store openings in Simon locations and IEM micro space rollouts in high traffic mall areas, supporting digitally native brands' physical expansion (Client Announcements).

Valuation Changes

Fair Value: Unchanged at approximately $193.45 per share, indicating a stable intrinsic value assessment.
Discount Rate: Fallen slightly from about 7.77% to 7.77%, reflecting a marginally lower implied cost of capital.
Revenue Growth: Essentially unchanged at around 0.64% long term growth, signaling stable top line assumptions.
Net Profit Margin: Stable at roughly 38.64%, with no material adjustment to long term profitability expectations.
Future P/E: Edged down slightly from about 32.66x to 32.65x, implying a modestly lower forward valuation multiple in the model.

Strong leasing demand, premium occupancy, and redevelopments into mixed-use destinations support revenue growth, margin expansion, and long-term earnings power.
Opportunistic acquisitions and retailer partnerships strengthen portfolio quality, diversify income streams, and drive sustained external growth and profitability.
Structural challenges from retail bankruptcies, elevated redevelopment costs, rising debt risks, and shifting consumer trends threaten portfolio occupancy, income stability, and long-term margin growth.

Catalysts

About Simon Property Group

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust (“REIT”).What are the underlying business or industry changes driving this perspective?

Continued strong leasing demand and rising occupancy rates (96%+ in Malls/Premium Outlets, 99%+ at The Mills), paired with growing average lease rates and increased shopper traffic (+1.5%), reflect the durable appeal of well-located retail space in dense, high-growth metropolitan areas. This positions Simon to drive higher revenue and NOI as urbanization and population growth in key markets persist.
Strategic redevelopment and transformation of existing assets into mixed-use, experience-focused environments-such as the ongoing projects and the Brickell City Centre acquisition-target evolving consumer preferences for experience-driven destinations, supporting not only stable rent growth but also incremental revenue from diversified income streams, thus enhancing margins and long-term earnings power.
The company is capitalizing on underappreciated value in premier, large-scale retail centers like Brickell by acquiring assets below replacement cost and at attractive cap rates, which strengthens the portfolio and offers upside through operational efficiencies, mark-to-market rent growth, and improved cash flow generation.
Simon's focus on deepening relationships with resilient, creditworthy retailers, and benefiting from the trend of retailers prioritizing top-tier, omni-channel-ready physical locations, underpins stable high occupancy and premium lease rates, directly supporting sustained growth in revenues and operating margins.
The flight to quality and sector consolidation favor large, well-capitalized players like Simon, enabling opportunistic acquisitions and joint ventures (often accretive), which increase scale advantages, diversify income, and offer external growth-propelling long-term FFO and earnings expansion.

Simon Property Group Earnings and Revenue Growth

Simon Property Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Simon Property Group's revenue will decrease by 0.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 35.0% today to 38.8% in 3 years time.
Analysts expect earnings to reach $2.4 billion (and earnings per share of $6.81) by about September 2028, up from $2.1 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $2.2 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 36.4x on those 2028 earnings, up from 27.7x today. This future PE is greater than the current PE for the US Retail REITs industry at 27.1x.
Analysts expect the number of shares outstanding to grow by 0.07% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.9%, as per the Simply Wall St company report.

Simon Property Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent retail bankruptcies and tenant turnover, exemplified by the 1.8 million square feet in retailer bankruptcies this quarter (notably Forever 21), suggest continued structural risks in the retail ecosystem, which could lead to higher vacancy rates and pressure both revenue and net operating income if such events accelerate or spread to other major tenants.
An ongoing need for redevelopment and capital-intensive repositioning of properties-including the $1 billion in development and redevelopment underway, with 40% in mixed-use projects-means elevated maintenance CAPEX requirements, which could reduce margins and constrain free cash flow available for dividends.
Rising interest rates and refinancing challenges, as evidenced by the weighted average interest rate on recent secured loans at 5.84% and acknowledgment of high leverage, pose a risk to future earnings and may pressure dividend coverage if debt is refinanced in a less favorable rate environment.
The company's dependence on continued strong tenant demand, despite management's admission that "retailers have all the power" and can close stores or shift business online, exposes Simon to structural risks from the accelerating growth of e-commerce and changing consumer preferences, which could ultimately weaken leasing power and suppress rent growth.
Flat or slowing traffic and sales at certain properties, especially those reliant on cross-border shoppers or international tourism (notably at US-Mexico and US-Canada border centers), highlight vulnerabilities to geopolitical shifts, travel disruptions, and macroeconomic headwinds-potentially impacting portfolio-wide occupancy and rental income over the long term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $184.05 for Simon Property Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $225.0, and the most bearish reporting a price target of just $169.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.2 billion, earnings will come to $2.4 billion, and it would be trading on a PE ratio of 36.4x, assuming you use a discount rate of 7.9%.
Given the current share price of $179.39, the analyst price target of $184.05 is 2.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

SPG: Recent Capital Markets Moves Will Shape Mixed-Use Retail Direction