SPG
Simon Property Group, Inc.
$205.08
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Strong
·
Conviction
Undervalued
Trading 44.1% below fair value
You pay
$205.08
Bear
$293.33
Fair
$366.66
Bull
$440.00
Bear
$293.33
+43.0%
$18.80 FFO × 16x
Fair
$366.66
+78.8%
$18.80 FFO × 20x
Bull
$440.00
+114.5%
$18.80 FFO × 23x
Adjust Assumptions
19.5x
$
Key Value Driver
FFO/share ($18.80) × retail P/FFO multiple
Implied Market Multiple
10.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$223.60
Divergence from AlphaVal
64%
Summary
At $18.80 FFO/share with a 20x retail REIT multiple, the base-case value is $366.66 per share. Dividend yield: 4.3%. DDM cross-check: $406.48.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Wall Street's average price target is $223.60 (from 38 analysts). Our estimate is 64% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify