SIMON PROPERTY GROUP, INC. (SPG): what the price requires
At today's price, SIMON PROPERTY GROUP, INC. (SPG) is priced for +1.5% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/SPG
Headline
| Field | Value |
|---|---|
| Ticker | SPG |
| Company | SIMON PROPERTY GROUP, INC. |
| Sector / Industry | Real Estate |
| Current price | $218.98/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | 1.5% |
| Price-to-FFO | 11.8x |
| FFO yield | 8.5% |
Solve inputs: computed at a 10.7% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~3.4pp.
Reconcile: at the x-ray's 9.3% required return this reads ~-3.9%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.56σ |
| cohort percentile (of 88 peers) | 35 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and relative-multiple and growth-DCF value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.96x | 4 | justifies |
| Earnings | 5.47x | 4 | expensive |
| Relative | 1.02x | 6 | expensive |
| Growth | 0.76x | 3 | justifies |
Families that justify the price: Asset, Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.8%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $366.20 | 0.60x | yes | FCF base $3.4B, growth 11% (input: historical growth), terminal g 4.0%, WACC 6.8%, 6yr projection |
| DCF Exit Multiple | Growth | $286.34 | 0.76x | yes | Exit EV/EBITDA: 18.7x / 20.7x / 22.7x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $356.84 | 0.61x | yes | P/E 25.7x (blended: static sector reference 35x + trailing (TTM) 12x), scenarios: 21.3x / 25.7x / 30.1x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $181.47 | 1.21x | yes | BV/sh $14.95, ROE (TTM) 112.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $1538.39 | 0.14x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $147.01 | 1.49x | yes | Rev $6.6B, growth 11% (input: historical growth; tapered), Terminal P/S: 6.6x / 8.0x / 9.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $223.44 | 0.98x | yes | FFO/share $18.62, growth 6% (input: historical FFO/share growth, 7y median), PEG=2.32 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $15.88 | 13.79x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.85B × (1−21%) / WACC 6.8% → EPV (no growth) |
| Residual Income | Asset | $307.82 | 0.71x | yes | BV $14.95 + 5yr PV of (ROE (TTM) 112.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $79.15 | 2.77x | yes | √(22.5 × FFO/share $18.62 × BVPS $14.95) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $208.15 | 1.05x | yes | EBITDA $4.77B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $22.21 | 9.86x | yes | FCF $3230.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $308.27 | 0.71x | yes | FFO/share $18.62 × (8.5 + 2×5.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $4.04 | 54.20x | yes | BV $14.95 × (ROIC 1.8% / WACC 6.8%) (excluded from median) |
| P/Sales Sector | Relative | $122.76 | 1.78x | yes | Revenue $6.65B × sector P/S 6.0x |
| PEG Fair Value | Relative | $157.16 | 1.39x | yes | FFO/share $18.62 × (PEG 1.5 × growth 5.6% (input: historical FFO/share growth, 7y median)) → PE 8.4x |
| Earnings Yield | Earnings | $201.30 | 1.09x | yes | FFO/share $18.62 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $263.99 | 0.83x | yes | FFO/share $18.62 × 14.2x P/FFO (route cohort median, n=85); FFO $6.05B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 325M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $27.4b |
| Net debt / FFO | 4.53x |
| Fixed-charge coverage (FFO basis) | 7.2x |
| Funds from operations (trailing) | $6.1b |
| Share count CAGR (buyback) | -0.3% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.
Bullet Takeaways
- Simon Property Group's malls and premium outlets are running at 96% occupancy with tenant sales of $819 per square foot, up 11.8%, and the roster in its own 10-K reads Prada, Gucci, Valentino, and Saint Laurent [FY2025 10-K, accession 0001104659-26-019419], not the vacancy story the mall label suggests.
- The structural risk is the one the filing names first: digital adoption "has accelerated the transition of a percentage of market share from shopping at physical stores to web-based shopping" [FY2025 10-K, accession 0001104659-26-019419], and $28.4 billion of mortgages and unsecured debt must keep rolling through whatever that transition does to rents.
- Watch the first full year under new CEO Eli Simon, who took over in March 2026: full-year Real Estate FFO guidance was raised to $13.10 to $13.25 per share and the dividend lifted 7.1% to $2.25 quarterly.
Bull Case
The single most counterintuitive dataset in American retail real estate belongs to the company everyone associates with dying malls. Simon's tenants sold $819 per square foot over the trailing year, up 11.8%; occupancy across malls and premium outlets hit 96%; base rents climbed more than 5% to nearly $62 per square foot; and retailers are approaching Simon to renew leases as much as three years before expiration. Landlords with pricing power do not chase tenants; tenants chase them. The 1,100 leases signed in the first quarter, a quarter of them new deals rather than renewals, describe a scarce asset: the A-quality mall and outlet portfolio survived the culling of the past decade and now faces demand with essentially no new supply behind it.
The portfolio quality is verifiable in the filing itself, where property after property lists tenant rosters like "Loro Piana, Marc Jacobs, Michael Kors, Moncler... Prada, Saint Laurent, Salvatore Ferragamo" [FY2025 10-K, accession 0001104659-26-019419]. Luxury and premium brands cluster where the traffic is, and their presence is both evidence of quality and a retention mechanism. Management is reinvesting into that scarcity rather than diluting it: more than $2 billion of near-term development projects with another $3 billion of future redevelopment opportunity, including $250 million modernizing malls in Nashville, Denver, and Tampa. The filing also notes the company continues to "pursue the disposition of properties that no longer meet our strategic criteria" [FY2025 10-K, accession 0001104659-26-019419]: the portfolio keeps getting more selective, not larger.
The cash engine is compounding through the transition of leadership. First-quarter Real Estate FFO of $3.17 per share rose 7.5% and beat consensus, full-year guidance moved up to $13.10 to $13.25, and the dividend was raised 7.1% to $2.25 quarterly, all in new CEO Eli Simon's first quarter after succeeding David Simon in March. At roughly 14 times adjusted funds from operations, the price asks the trust to grow those cash earnings only about 2% a year, sitting in the lower half of the REIT group's range. A landlord currently raising rents 5% with tenants renewing years early has a low bar to step over.
Bear Case
Every retail landlord metric on the page is a late-cycle metric. Tenant sales per square foot up 11.8%, occupancy at 96%, rents up 5%, retailers renewing three years early: these describe retailers at peak health, and retailer health is the raw input to mall rents. The cycle question is not whether Simon's numbers are good today; it is what the same leases look like when consumer spending turns and the marginal tenant stops bidding. The company's own risk section leads with the structural version: digital and mobile adoption "has accelerated the transition of a percentage of market share from shopping at physical stores to web-based shopping" [FY2025 10-K, accession 0001104659-26-019419]. E-commerce did not kill the A-mall, but it set a ceiling on how many of them the economy needs, and Simon is now spending $2 billion-plus on development into that ceiling.
The balance sheet is built for scale, which cuts both ways. Total mortgages and unsecured indebtedness stood at $28.4 billion at year-end 2025, alongside a $5.0 billion credit facility, commercial paper, and a euro term loan [FY2025 10-K, accession 0001104659-26-019419]. Net debt runs about 4.6 times funds from operations with fixed-charge coverage of 6.9 times, comfortable while cash flows grow, but every year a tranche of that stack reprices at prevailing rates, and the implied growth cushion in the price (about 2% a year on adjusted funds from operations) is thin enough that a rate shock or an occupancy stumble consumes it quickly. Beyond the properties, Simon holds retailer-operating exposures the pure-landlord thesis does not advertise, including a $100 million share of a loan to SPARC Group, the apparel venture it co-owns [FY2025 10-K, accession 0001104659-26-019419]; when retail turns, Simon is a creditor and equity holder of retailers, not just their landlord.
Leadership adds a variable. Eli Simon took the CEO seat in March 2026, and while the street reads the succession as competent continuity, the redevelopment-heavy strategy he inherits commits billions of capex years ahead of the demand it assumes. The consensus rating sits at Hold, which is the market saying the good news is on the tape. At 96% occupancy, rent growth is the only remaining lever, and rent growth is exactly what a consumer downturn takes first.
Valuation
A real-estate trust is priced on its adjusted funds from operations: cash earnings plus the property depreciation accounting removes, minus the recurring maintenance capex that keeps buildings leasable. On that basis the market pays about 14 times, which implies adjusted funds from operations growing roughly 1.9% a year, a pace within what Simon has itself delivered and a multiple in the lower half of the REIT group's range. The gross measure the company guides on, Real Estate FFO of $13.10 to $13.25 per share for 2026, is the figure adjusted funds from operations refines by netting out that maintenance spend. Against the raised $2.25 quarterly dividend, the payout runs about two-thirds of guided FFO (a higher fraction of the stricter adjusted measure), leaving retained cash for the $2 billion development pipeline.
The triangulating lenses mostly agree with the price. Asset-value arithmetic and peer multiples land essentially at it, the funds-from-operations peer multiple actually sits somewhat above it (price about 13% below what that lens defends), and the forward-growth methods land about a third above. The one loud dissent, a GAAP earnings-power read several times below the price, capitalizes income after property depreciation, the very charge the cash-flow measures add back, so for a REIT it flags the accounting basis rather than the value. The overall pattern is a name priced at, or slightly below, what most methods support, with the market charging nothing exotic for the growth.
Leverage is the standing condition. Net debt of $27.7 billion runs about 4.6 times funds from operations (leverage read against FFO, not the adjusted measure the pricing uses; the two differ by maintenance capex), fixed-charge coverage is 6.9 times, and the share count has been flat to slightly shrinking over four years. The debt stack, $28.4 billion of mortgages and unsecured notes at year-end with a $5.0 billion facility behind it [FY2025 10-K, accession 0001104659-26-019419], rolls continuously, so the price's modest 2% growth requirement has to be earned net of whatever refinancing costs the rate environment sets. The bet at $218.76 (July 10, 2026) is that scarce A-quality retail real estate keeps its 96% occupancy and mid-single-digit rent growth through the next consumer cycle; nothing in the price requires more than that.
Catalysts
The May earnings print delivered a triple: first-quarter Real Estate FFO of $3.17 per share beat consensus by 6.4% and grew 7.5%, full-year guidance rose to $13.10 to $13.25 per share, and the quarterly dividend was raised 7.1% to $2.25. The next quarterly report, on the usual early-August cadence, tests whether occupancy holds 96% and whether tenant sales momentum ($819 per square foot, up 11.8%) survives a softer consumer tape.
The leadership transition is the year's structural event: Eli Simon succeeded David Simon as CEO in March 2026 and used his first earnings call to commit to more than $2 billion of near-term development projects plus $3 billion of future redevelopment, including $250 million of upgrades across Nashville, Denver, and Tampa and the Copley Place luxury conversion in Boston. Groundbreakings and yield disclosures on those projects are the medium-term markers.
Leasing behavior is the leading indicator to track between prints: Simon signed over 1,100 leases covering 4.7 million square feet in Q1, a quarter of them new deals, and management reports non-luxury retailers opening renewal conversations for 2027 through 2029 expirations years early. Analyst consensus sits at Hold following the stock's run, so incremental upside likely requires either another guidance raise or evidence the development pipeline is delivering accretive yields.
Peer Cohorts (Per Segment, With Filing Citations)
Real estate (single reportable segment) (reported)
- MAC (MACERICH CO)
- (no filing in the citation store)
- BRX (Brixmor Property Group Inc.)
- (no filing in the citation store)
- KIM (KIMCO REALTY CORPORATION)
- (no filing in the citation store)
- REG (REGENCY CENTERS CORPORATION)
- (no filing in the citation store)
- FRT (FEDERAL REALTY INVESTMENT TRUST)
- (no filing in the citation store)
- KRG (KITE REALTY GROUP TRUST)
- (no filing in the citation store)
- CBL (CBL & ASSOCIATES PROPERTIES, INC.)
- (no filing in the citation store)
- UE (URBAN EDGE PROPERTIES)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release, May 2026 · Q1 2026 earnings release and PYMNTS/Bisnow coverage, 2026 · CRE Daily and Bisnow, 2026 · Commercial Observer, April 2026 · CRE Daily, 2026 · MarketBeat, May 2026 · Commercial Observer, CRE Daily, Bisnow, 2026 · PYMNTS and company commentary, 2026