Simon Property Group: Scotiabank Maintains Sector Perform, Raises PT to $173 from $163.

Simon Property Group: Scotiabank Maintains Sector Perform, Raises PT to $173 from $163.

Simon Property Group (SPG) continues to receive mixed analyst sentiment, as Scotiabank recently raised its price target (PT) to $173 from $163, maintaining a "Sector Perform" rating. This update comes amidst a period of varied analyst opinions and robust financial performance.

Scotiabank's decision to raise the PT reflects the company's strong quarterly results and continued growth in real estate funds from operations (FFO). SPG's Q2 2025 results showed a 2.8% year-over-year (YoY) increase in top-line revenue to $1.5 billion and a 4.2% YoY rise in net operating income (NOI) [2]. The company's real estate FFO grew by 4.1% YoY to $3.05 per share, surpassing consensus estimates by 33 basis points. Analysts expect a real estate FFO of $12.53 per share for FY25, down 3.5% YoY.

However, the stock has seen conflicting sentiments among analysts. While some firms like Stifel and Evercore ISI have maintained a Buy rating, others like Scotiabank and BMO Capital have lowered their price targets. Truist Securities, for instance, raised its PT to $169 but maintained a Hold rating, reflecting the mixed signals from other analysts [1].

The company's financial health remains robust, with a net margin of 37.11% and a return on equity (ROE) of 22.35%. However, the debt-to-equity ratio of 10.75 highlights significant leverage risks, and the unsustainably high payout ratio of 133.76% raises concerns. Despite these risks, the company's dividend increase to $2.15 per share from $2.05 per share and recent earnings growth of 2.71% underscore its appeal to income-focused investors.

Institutional ownership remains strong at 93.01%, with insiders purchasing $380,066 worth of shares in the past three months, while short interest declined by 7.97%. Hedge funds like JPMorgan and Bank of America increased holdings in Q2 2025, while others, including BlackRock, reduced stakes [1].

Overall, SPG's Q2 2025 results were solid, but the market's reaction has been tempered by the mixed analyst sentiments. Investors should continue to monitor the company's performance and analyst ratings as more data becomes available.

References:
[1] https://www.ainvest.com/news/simon-property-group-analysts-views-spg-stock-2508/
[2] https://www.ainvest.com/news/simon-property-group-truist-securities-maintains-hold-raises-pt-169-2508/