2024-01-23 09:00:00 ET
Summary
- Simon Property Group has seen a significant increase in its share price and is trading at pre-pandemic levels.
- REITs, including SPG, could benefit from a rate easing cycle and investors seeking yield.
- The narrative that e-commerce is killing physical retail is incorrect, and physical retail is still thriving with a potential for growth.
Simon Property Group ( SPG ) is back to pre-pandemic levels, and despite appreciating by 35.47% ($37.08) since October 27 th, I still think there is an opportunity here. While shares of SPG aren't as heavily discounted as they were in the middle of 2023, there could still be value to be extracted as SPG trades at 12.12x its funds from operations ((FFO)) per share and pays a 5.37% dividend yield. I believe that REITs could be a big beneficiary in 2024 due to a rate easing cycle as the worry about refinancing debt dissipates and investors looking for yield find a new home for capital sitting on the sidelines. The mall isn't dying, and shares of SPG continue to thrive. We're headed into earnings season, and SPG is coming off a double beat in Q3. I think the rally can continue, considering shares trade at a discounted valuation compared to other REITs, and they raised guidance on the Q3 earnings call , so an earnings beat would send an overly bullish signal....
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Simon Property: The Upside Is Still Attractive, So It's A Buy