What Should We Expect From Simon Property Group, Inc.’s (NYSE:SPG) Earnings In The Years Ahead?

Simon Property Group, Inc.’s (NYSE:SPG) announced its latest earnings update in December 2018, which showed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 25%. Below, I’ve laid out key growth figures on how market analysts predict Simon Property Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Simon Property Group

Analysts’ expectations for the upcoming year seems pessimistic, with earnings decreasing by -7.4%. In the next couple of years, earnings should continue to be below today’s level, with a decrease of -2.6% in 2021, eventually reaching US$2.4b in 2022.

NYSE:SPG Past and Future Earnings, April 4th 2019
NYSE:SPG Past and Future Earnings, April 4th 2019

Although it is helpful to be aware of the rate of growth year by year relative to today’s value, it may be more beneficial to evaluate the rate at which the business is rising or falling on average every year. The advantage of this technique is that we can get a better picture of the direction of Simon Property Group’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -0.6%. This means, we can expect Simon Property Group will chip away at a rate of -0.6% every year for the next couple of years.

Next Steps:

For Simon Property Group, I’ve compiled three key aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is SPG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SPG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SPG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.