Simon Reports Upbeat Q2 Results; Shares Rally 2.8%

Real estate company Simon Property Group (SPG) reported better-than-expected Q2 results as both earnings and revenues topped estimates. Shares of the company rose 2.8% in Tuesday’s pre-market trading session.

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Net income per share of $1.88 grew substantially year-over-year and exceeded analysts’ expectations of $1.12 per share. Revenues stood at $1.25 billion, up 18.1% from the same quarter last year, and surpassed the Street’s consensus of $1.1 billion.

Funds from operations (FFO) came in at $3.24 per share, including a non-cash gain of $0.32 per share, because of the reversal of a deferred tax liability associated with an international investment. (See Simon stock charts on TipRanks)

Notably, net operating income from domestic and international properties increased 16.6% from the year-ago period.

The Chairman, CEO and President at Simon Property Group, David Simon, said, “We are encouraged by the increase in our shopper traffic, retailer sales and leasing activity. Based upon our results to date and expectations for the remainder of 2021, we are again increasing our full-year 2021 guidance and again raising our quarterly dividend.”

For 2021, the company anticipates earnings in the range of $5.47-$5.57 per share. The company projects 2021 FFO to be in the range of $10.70-$10.80 per share.

Also, Simon has declared a 7.1% hike in its third-quarter 2021 dividend. The dividend will be payable on September 30, 2021, to shareholders of record on September 9, 2021.

Following the results release, BMO Capital analyst Juan C. Sanabria reiterated a Hold rating on Simon with a price target of $125 (downside potential of 2.4%).

Sanabria noted, “The core real estate business is improving faster than expected with occupancy up, retail sales back to ’19 levels & leasing momentum strong.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 5 Buys and 5 Holds. The average Simon price target of $137.90 implies 5.6% upside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Simon with 13.2% of investors, registered on TipRanks, increasing their exposure to SPG stock over the past 30 days.