Simon Property closes 7th straight session of gain as most REITs advance on rate cut hopes

Simon Real Estate GroupNYSE:SPG) closed a seventh straight session of gains on Tuesday, July 16, as real estate investment trusts saw a fresh surge in stock prices on the back of economic data supporting the case for interest rate cuts.

The arrow is finished Trading day 0.99% High at $151.54.

SPG has added 2.69% Over the past six trading days, we saw a big rally on Wednesday, July 10, on the back of comments from Federal Reserve Chairman Jerome Powell that did little to disrupt the narrative around a September rate cut.

It is worth noting that similar stocks such as Realty Income, Kimco Realty, Regency Centers, and Federal Realty Investment Trust have followed a somewhat similar pattern.

SPG is scheduled to report second-quarter earnings results on August 5. The consensus FFO estimate is $2.95 (+2.35% year-over-year) and the consensus revenue estimate is $1.32 billion (-3.68% year-over-year).

Sell-side analysts rate the stock as a Buy.

Alpha analysts as well as the Quant Rating system assign a Hold rating to SPG.

“While I still hold SPG in my portfolio as an expected dividend stock, I certainly wouldn’t recommend assuming significant exposure to SPG,” said Roberts Berzins, author of “Securities and Investing.”

“The fact that current multiples are roughly at the same level as they were before the COVID-19 outbreak, and also taking into account the relatively weak FFO growth outlook, I do not believe that SPG will be able to post good price appreciation returns in the foreseeable future,” the author added.