Simon Property (SPG) Down 3.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Simon Property (SPG). Shares have lost about 3.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Simon Property due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Simon Property Group, Inc. before we dive into how investors and analysts have reacted as of late.
Simon Property's Q2 FFO Tops Estimates on Leasing Strength, Guidance Raised
Simon Property Group delivered second-quarter 2026 Real Estate FFO of $3.29 per share, topping the Zacks Consensus Estimate of $3.18 by 3.46% and increasing 7.9% year over year. Total revenues of $1.79 billion beat the consensus mark of $1.71 billion by 4.49% and rose 19.5% from the year-ago quarter.
Broad-based leasing demand, higher traffic, retailer sales growth and contributions from acquisitions supported results. U.S. Malls and Premium Outlets occupancy remained 96%, unchanged year over year, while retailer sales per square foot jumped 13.9%.
Simon Property's Lease Income Powers Revenue Growth
Lease income increased 20.3% year over year to $1.66 billion. Fixed lease income reached $1.35 billion compared with $1.13 billion a year earlier, while variable lease income increased to $310.6 million from $246.7 million.
Management fees and other revenues rose 7.7% to $40.8 million. Other income advanced 11.1% to $90.1 million, aided by higher mixed-use and franchise operations income and other ancillary sources.
Simon Property’s Property Metrics Stay Firm
Base minimum rent per square foot for U.S. Malls and Premium Outlets climbed 6.3% year over year to $62.42. Reported retailer sales per square foot increased to $838 for the trailing 12 months ended June 30, 2026, from $736 a year earlier.
The Mills portfolio remained highly occupied at 98.8%, down from 99.3% a year ago. Its base minimum rent per square foot increased to $42.28 from $37.65, indicating higher rental rates across the portfolio.
Simon Property Posts Strong Property-Level NOI Growth
Domestic property NOI increased 8.5% year over year to $1.51 billion. Portfolio NOI, which includes domestic and international properties, rose 8.3% to $1.60 billion.
Beneficial interest of the combined NOI increased 6.4% to $1.75 billion. International property NOI totaled $96 million compared with $91.3 million in the prior-year quarter, while NOI from other platform investments declined to $31.8 million from $41.7 million.
Simon Property Sees Higher Costs & Interest Expense
Total operating expenses increased 28.1% year over year to $966.5 million. Depreciation and amortization rose to $459.9 million from $339.1 million, while property operating expenses increased to $171.4 million from $139.8 million. Interest expense climbed 20.8% to $281.2 million.
Simon Property Maintains Ample Balance Sheet Liquidity
Simon ended the June 2026 quarter with approximately $9.3 billion of liquidity, comprising $1.7 billion of cash on hand, including its share of joint venture cash, and $7.6 billion of available capacity under its revolving credit facilities.
During the second quarter, Simon Property completed eight secured loan transactions totaling approximately $1.4 billion at a weighted average interest rate of 5.36%. It also issued €500 million of five-year senior notes carrying a 3.65% coupon and closed a $460 million five-year term loan priced at SOFR plus 0.70%.
Simon Property Raises 2026 Real Estate FFO Outlook
Simon increased its full-year 2026 Real Estate FFO per share guidance to $13.20-$13.30 from $13.10-$13.25. The midpoint of the updated range is 8 cents above the midpoint of the previous outlook.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
VGM Scores
Currently, Simon Property has a poor Growth Score of F, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Simon Property has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Simon Property is part of the Zacks REIT and Equity Trust - Retail industry. Over the past month, Regency Centers (REG), a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended June 2026 more than a month ago.
Regency Centers reported revenues of $413.51 million in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $0.61 for the same period compares with $1.16 a year ago.
For the current quarter, Regency Centers is expected to post earnings of $1.22 per share, indicating a change of +6.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.4% over the last 30 days.
Regency Centers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).
