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Here's How Simon Property (SPG) Looks Ahead of Q3 Earnings
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Simon Property Group (SPG - Free Report) is scheduled to report third-quarter 2020 earnings on Nov 9, after market close. The company’s quarterly results will likely display declines in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Indianapolis, IN-based retail real estate investment trust (REIT) reported a negative surprise of 8.23% in terms of FFO per share. Results reflected the adverse impact of the coronavirus pandemic on the company’s domestic and international operations.
In the last four quarters, the company exceeded the Zacks Consensus Estimate on one occasion, met in another and missed in the other two. It has a trailing four-quarter negative surprise of 3.01%, on average. This is depicted in the graph below:
Let’s see how things have shaped up for this announcement.
Factors at Play
The retail real estate market had already been battling dwindling traffic issues, store closures and retailer bankruptcies, and now the pandemic is only adding to its woes. Despite retail sales rebounding to the pre-COVID levels during the July-September period, with an improvement in consumer sentiment, per a report from CBRE Group (CBRE - Free Report) , the total retail availability rate expanded 20 basis points (bps) to 6.6% during the quarter, signaling the weakening retail real estate fundamentals.
Particularly, the pandemic’s impact has been most for experience-based retail, including full-service restaurants, fitness centers and movie theaters. Negative net absorption aggregated nearly 15 million square feet. This was mainly in the neighborhood, community & strip center segment, and represented the largest decline since the first quarter of 2009. Moreover, construction completions of less than 6 million square feet marked the lowest quarterly total ever recorded.
Like other retail REITs including Macerich (MAC - Free Report) and Kimco Realty (KIM - Free Report) , Simon Property too is not immune to move-outs, store closures and retailer bankruptcies. The choppy retail real estate environment is anticipated to have continued hindering its growth momentum in the September-end quarter, as secular industry headwinds have been casting a pall on industry fundamentals. In addition, the coronavirus-led headwinds translated to financial stress on retail tenants, impacting their ability to pay rent, affecting the company’s ability to recognize revenues in terms of rent collection and lease income.
However, the company has a wide exposure to different retail assets, including premium malls, lifestyle centers and other retail properties across the United States. Hence, the reopening of the retail sector in several parts of the United States has come as a relief. This is because, with more reopening of stores, tenants stand in a better position to generate revenues and meet their rent payments. Thus, the pressure on retail landlords is likely to have reduced to some extent and their rent-collection figures are expected to improve. Also, focus on controlling non-essential corporate spending and property operating expenses is likely to have partly alleviated pressure on the bottom line in the quarter to be reported.
The Zacks Consensus Estimate for third-quarter lease income is pegged at $1.04 million and indicates a decline of 20.2% from the prior-year quarter’s reported figure. Management fees and other revenues are pinned at $24.53 million, suggesting 12.3% decline year on year. Moreover, the consensus estimate for third-quarter revenues is currently pinned at $1.12 billion, suggesting a decline of 20.9% year over year. Occupancy of its total portfolio is expected to decline to 92% in the quarter from 93% in the prior quarter.
Lastly, Simon Property’s activities during the July-September quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate for the FFO per share moved 1.3% south in the past month and is currently pinned at $2.25. The figure also suggests a 26.2% decline from the year-ago quarter.
Here is What our Quantitative Model Predicts
Our proven model does not conclusively predict a beat in terms of FFO per share for Simon Property this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Simon Property currently carries a Zacks Rank #4 (Sell) and has Earnings ESP of 0.00%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Here's How Simon Property (SPG) Looks Ahead of Q3 Earnings
Simon Property Group (SPG - Free Report) is scheduled to report third-quarter 2020 earnings on Nov 9, after market close. The company’s quarterly results will likely display declines in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Indianapolis, IN-based retail real estate investment trust (REIT) reported a negative surprise of 8.23% in terms of FFO per share. Results reflected the adverse impact of the coronavirus pandemic on the company’s domestic and international operations.
In the last four quarters, the company exceeded the Zacks Consensus Estimate on one occasion, met in another and missed in the other two. It has a trailing four-quarter negative surprise of 3.01%, on average. This is depicted in the graph below:
Simon Property Group, Inc. Price and EPS Surprise
Simon Property Group, Inc. price-eps-surprise | Simon Property Group, Inc. Quote
Let’s see how things have shaped up for this announcement.
Factors at Play
The retail real estate market had already been battling dwindling traffic issues, store closures and retailer bankruptcies, and now the pandemic is only adding to its woes. Despite retail sales rebounding to the pre-COVID levels during the July-September period, with an improvement in consumer sentiment, per a report from CBRE Group (CBRE - Free Report) , the total retail availability rate expanded 20 basis points (bps) to 6.6% during the quarter, signaling the weakening retail real estate fundamentals.
Particularly, the pandemic’s impact has been most for experience-based retail, including full-service restaurants, fitness centers and movie theaters. Negative net absorption aggregated nearly 15 million square feet. This was mainly in the neighborhood, community & strip center segment, and represented the largest decline since the first quarter of 2009. Moreover, construction completions of less than 6 million square feet marked the lowest quarterly total ever recorded.
Like other retail REITs including Macerich (MAC - Free Report) and Kimco Realty (KIM - Free Report) , Simon Property too is not immune to move-outs, store closures and retailer bankruptcies. The choppy retail real estate environment is anticipated to have continued hindering its growth momentum in the September-end quarter, as secular industry headwinds have been casting a pall on industry fundamentals. In addition, the coronavirus-led headwinds translated to financial stress on retail tenants, impacting their ability to pay rent, affecting the company’s ability to recognize revenues in terms of rent collection and lease income.
However, the company has a wide exposure to different retail assets, including premium malls, lifestyle centers and other retail properties across the United States. Hence, the reopening of the retail sector in several parts of the United States has come as a relief. This is because, with more reopening of stores, tenants stand in a better position to generate revenues and meet their rent payments. Thus, the pressure on retail landlords is likely to have reduced to some extent and their rent-collection figures are expected to improve. Also, focus on controlling non-essential corporate spending and property operating expenses is likely to have partly alleviated pressure on the bottom line in the quarter to be reported.
The Zacks Consensus Estimate for third-quarter lease income is pegged at $1.04 million and indicates a decline of 20.2% from the prior-year quarter’s reported figure. Management fees and other revenues are pinned at $24.53 million, suggesting 12.3% decline year on year. Moreover, the consensus estimate for third-quarter revenues is currently pinned at $1.12 billion, suggesting a decline of 20.9% year over year. Occupancy of its total portfolio is expected to decline to 92% in the quarter from 93% in the prior quarter.
Lastly, Simon Property’s activities during the July-September quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate for the FFO per share moved 1.3% south in the past month and is currently pinned at $2.25. The figure also suggests a 26.2% decline from the year-ago quarter.
Here is What our Quantitative Model Predicts
Our proven model does not conclusively predict a beat in terms of FFO per share for Simon Property this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Simon Property currently carries a Zacks Rank #4 (Sell) and has Earnings ESP of 0.00%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>