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Simon Property (SPG) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Simon Property (SPG) closed at $64.99 in the latest trading session, marking a +0.43% move from the prior day. This move lagged the S&P 500's daily gain of 1.78%. At the same time, the Dow added 2.06%, and the tech-heavy Nasdaq gained 1.85%.

Prior to today's trading, shares of the shopping mall real estate investment trust had lost 5.89% over the past month. This has lagged the Finance sector's gain of 0.03% and the S&P 500's loss of 1.1% in that time.

SPG will be looking to display strength as it nears its next earnings release, which is expected to be November 9, 2020. On that day, SPG is projected to report earnings of $2.25 per share, which would represent a year-over-year decline of 26.23%. Meanwhile, our latest consensus estimate is calling for revenue of $1.12 billion, down 20.92% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.59 per share and revenue of $4.70 billion. These totals would mark changes of -20.35% and -18.39%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for SPG. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.39% lower within the past month. SPG is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that SPG has a Forward P/E ratio of 6.75 right now. This valuation marks a discount compared to its industry's average Forward P/E of 9.08.

It is also worth noting that SPG currently has a PEG ratio of 1.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The REIT and Equity Trust - Retail was holding an average PEG ratio of 5.31 at yesterday's closing price.

The REIT and Equity Trust - Retail industry is part of the Finance sector. This group has a Zacks Industry Rank of 247, putting it in the bottom 3% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SPG in the coming trading sessions, be sure to utilize Zacks.com.

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Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
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Zacks Investment Research