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UPDATE: Deutsche Bank Reiterates On Simon Property Group As Washington Prime Spin-Off Is Complete

Dwight Einhorn

In a report published Friday, Deutsche Bank analyst Greg Poole reiterated a Buy rating on Simon Property Group (NYSE: SPG), but lowered the price target from $192.00 to $182.00.

In the report, Deutsche Bank noted, “On 5/28/14, SPG announced the completion of the spin-off of Washington Prime Group Inc. (WPG: DB not rated) as an independent public company, with regular way trading starting on 5/29/14. This morning, as expected, SPG provided updated 2014 and 2Q14 FFO guidance to reflect the impact of the spin-off. 2014 guidance is now $8.96-$9.06 versus $9.60-$9.70 previously. Included in guidance are 10c of associated transaction charges. 2Q14 FFO/sh is expected to be $2.10-$2.12. The dilution from the spin out is consistent with our expectations based on pro-forma data provided in prior SEC filings.

"As we indicated in our note dated 12/13/13, we do not view the spin-out as inherently value-creative, but believe SPG's post-spin growth profile and increased focus on its remaining mall business could benefit cash flow growth over time and act as a catalyst that highlights the underappreciated value in the shares. With our positive outlook for SPG unchanged, we reiterate our Buy rating.”

Simon Property Group closed on Thursday at $165.29.

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