Citi Has Hold On Simon Property Group

Citi Investment Research has a Hold rating on shares of Simon Property Group Inc SPG after meeting with company management yesterday. It has a $106 price target on shares. In a note to clients, Citi Investment Research writes, "Our meetings with Simon's senior and operating management team at their Indianapolis headquarters this week provided valuable insights into Simon's attractive growth opportunities, strategic direction, operations and depth of management expertise. Investor concerns typically center on Simon's large size and the ability to find equally sizeable accretive deals. However, Simon's size drives operational efficiencies, leasing across the company's 4 key retail platforms (“cross fertilization”) and provides the opportunity to develop and execute sophisticated technological initiatives. In addition, Simon's fortress balance sheet and size provides the opportunity for large transactions. Despite a slight ‘slowdown' in retail conditions in the past 4-6 weeks, we continue to like the mall and outlet space given fundamentals and capital attracted to the sector. At a 6% implied cap rate and 20x cash flow, we retain our model portfolio overweight position in Simon." Shares of SPG closed at $115.74 yesterday.