SPG

We rate SIMON PROPERTY GROUP INC /DE/ (SPG) as a Hold with a composite score of 58.3/100 at a current price of $200.00. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (69th percentile) and stability (62th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (37th percentile) and momentum (55th percentile) tempers our overall conviction. We assign a Narrow Moat rating (42/100), High uncertainty, and Standard capital allocation.

Key items to watch: balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

SIMON PROPERTY GROUP INC /DE/ holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.3/100 places it at rank #854 in our full 7,333-stock universe. With a $60.5B market capitalization, SIMON PROPERTY GROUP INC /DE/ operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 10%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 98% (+21.5pp vs sector) narrow to operating margins of 50% (+33.4pp vs sector) and net margins of 39.1%, yielding a gross-to-net conversion rate of 40%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $200.00, SIMON PROPERTY GROUP INC /DE/ is trading near fair value based on current fundamentals. Our value factor score of 56/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 27.7x (a 132% premium to the sector median of 11.9x), EV/EBITDA of 20.9x (at a premium), P/B of 24.0x, P/S of 10.8x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to SIMON PROPERTY GROUP INC /DE/. Key risk factors include significant leverage (945% debt-to-equity). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (945% debt-to-equity). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 62th percentile and quality factor at the 69th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 98% provide a buffer against cost pressures; above-average stability (62th percentile) suggests predictable business dynamics; large-cap scale ($60.5B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate SIMON PROPERTY GROUP INC /DE/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 86.9%, and the balance sheet is managed within acceptable parameters (D/E: 945%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; SIMON PROPERTY GROUP INC /DE/ falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 4.56% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, SIMON PROPERTY GROUP INC /DE/ receives a Hold rating with a composite score of 58.3/100 (rank #854 of 7,333). Our quantitative framework assigns a Narrow Moat (42/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 56/100.

Our analysis supports a neutral stance on SIMON PROPERTY GROUP INC /DE/. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.