Zacks Investment Research upgraded shares of Simon Property Group Inc. (SPG) from UNDERPERFORM to NEUTRAL on September 12, 2014, with a target price of $179.00.
We are upgrading our recommendation on Simon Property to Neutral from Underperform, backed by its concerted efforts to embrace technology and strengthen its relationship with customers. As online shopping continues to grab consumer focus with lucrative deals, Simon Property has undertaken prudent initiatives like re-launching its brand and adopting several marketing programs which we believe will lead to increased traffic at its properties and higher demand for its space. Also, Simon Property's second-quarter 2014 FFO per share came ahead of both the Zacks Consensus Estimate and the year-ago quarter figure, thanks to a rise in base minimum rent and occupancy rate. The company also hiked its 2014 FFO per share guidance. Nevertheless, though the spin-off decision stands good for the long term, its near-term dilution impact on earnings is unavoidable. At the same time, implementation of strategies to draw in more crowds to its retail properties requires a decent upfront cost.
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