Intrinsic value of Simon Property Group - SPG

Previous Close

$153.58

  Intrinsic Value

$29.86

stock screener

  Rating & Target

str. sell

-81%

  Value-price divergence*

+62%

Previous close

$153.58

 
Intrinsic value

$29.86

 
Up/down potential

-81%

 
Rating

str. sell

 
Value-price divergence*

+62%

Our model is not good at valuating stocks of financial companies, such as SPG.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of SPG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 48.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.21
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  5,435
  5,544
  5,671
  5,817
  5,981
  6,162
  6,361
  6,577
  6,812
  7,065
  7,336
  7,626
  7,935
  8,265
  8,615
  8,987
  9,380
  9,797
  10,238
  10,704
  11,196
  11,715
  12,262
  12,839
  13,447
  14,087
  14,761
  15,470
  16,217
  17,002
  17,828
Variable operating expenses, $m
 
  2,600
  2,660
  2,728
  2,805
  2,890
  2,983
  3,084
  3,194
  3,313
  3,440
  3,574
  3,719
  3,873
  4,037
  4,211
  4,396
  4,591
  4,798
  5,016
  5,247
  5,490
  5,746
  6,017
  6,302
  6,602
  6,917
  7,250
  7,600
  7,968
  8,355
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,767
  2,600
  2,660
  2,728
  2,805
  2,890
  2,983
  3,084
  3,194
  3,313
  3,440
  3,574
  3,719
  3,873
  4,037
  4,211
  4,396
  4,591
  4,798
  5,016
  5,247
  5,490
  5,746
  6,017
  6,302
  6,602
  6,917
  7,250
  7,600
  7,968
  8,355
Operating income, $m
  2,669
  2,944
  3,011
  3,089
  3,176
  3,272
  3,378
  3,493
  3,618
  3,752
  3,896
  4,052
  4,217
  4,392
  4,578
  4,775
  4,984
  5,206
  5,440
  5,688
  5,949
  6,225
  6,516
  6,822
  7,145
  7,485
  7,843
  8,220
  8,617
  9,034
  9,473
EBITDA, $m
  3,997
  4,303
  4,402
  4,515
  4,642
  4,783
  4,937
  5,105
  5,287
  5,483
  5,694
  5,919
  6,159
  6,415
  6,687
  6,975
  7,281
  7,604
  7,946
  8,308
  8,690
  9,092
  9,517
  9,965
  10,437
  10,934
  11,457
  12,007
  12,587
  13,196
  13,837
Interest expense (income), $m
  887
  896
  915
  939
  967
  999
  1,033
  1,072
  1,113
  1,158
  1,207
  1,259
  1,314
  1,374
  1,437
  1,504
  1,575
  1,651
  1,731
  1,816
  1,905
  1,999
  2,099
  2,204
  2,315
  2,431
  2,554
  2,683
  2,820
  2,963
  3,114
Earnings before tax, $m
  2,135
  2,048
  2,097
  2,150
  2,209
  2,274
  2,344
  2,421
  2,504
  2,594
  2,689
  2,793
  2,902
  3,018
  3,141
  3,271
  3,409
  3,555
  3,709
  3,872
  4,044
  4,225
  4,417
  4,618
  4,830
  5,054
  5,289
  5,537
  5,798
  6,072
  6,360
Tax expense, $m
  0
  553
  566
  580
  596
  614
  633
  654
  676
  700
  726
  754
  784
  815
  848
  883
  920
  960
  1,001
  1,045
  1,092
  1,141
  1,193
  1,247
  1,304
  1,365
  1,428
  1,495
  1,565
  1,639
  1,717
Net income, $m
  1,839
  1,495
  1,531
  1,569
  1,612
  1,660
  1,711
  1,768
  1,828
  1,893
  1,963
  2,039
  2,119
  2,203
  2,293
  2,388
  2,489
  2,595
  2,708
  2,827
  2,952
  3,085
  3,224
  3,371
  3,526
  3,689
  3,861
  4,042
  4,232
  4,432
  4,643

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  560
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  31,104
  31,678
  32,407
  33,240
  34,175
  35,211
  36,348
  37,586
  38,925
  40,369
  41,918
  43,576
  45,344
  47,227
  49,229
  51,352
  53,603
  55,985
  58,504
  61,166
  63,976
  66,941
  70,069
  73,365
  76,838
  80,496
  84,348
  88,402
  92,668
  97,156
  101,876
Adjusted assets (=assets-cash), $m
  30,544
  31,678
  32,407
  33,240
  34,175
  35,211
  36,348
  37,586
  38,925
  40,369
  41,918
  43,576
  45,344
  47,227
  49,229
  51,352
  53,603
  55,985
  58,504
  61,166
  63,976
  66,941
  70,069
  73,365
  76,838
  80,496
  84,348
  88,402
  92,668
  97,156
  101,876
Revenue / Adjusted assets
  0.178
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
Average production assets, $m
  24,215
  24,697
  25,265
  25,915
  26,644
  27,451
  28,338
  29,303
  30,347
  31,473
  32,681
  33,973
  35,352
  36,820
  38,380
  40,035
  41,790
  43,647
  45,611
  47,686
  49,877
  52,189
  54,627
  57,197
  59,905
  62,757
  65,760
  68,920
  72,246
  75,745
  79,425
Working capital, $m
  0
  -554
  -567
  -582
  -598
  -616
  -636
  -658
  -681
  -706
  -734
  -763
  -794
  -826
  -862
  -899
  -938
  -980
  -1,024
  -1,070
  -1,120
  -1,171
  -1,226
  -1,284
  -1,345
  -1,409
  -1,476
  -1,547
  -1,622
  -1,700
  -1,783
Total debt, $m
  22,977
  23,458
  24,085
  24,802
  25,607
  26,500
  27,478
  28,544
  29,698
  30,941
  32,275
  33,702
  35,224
  36,846
  38,569
  40,397
  42,335
  44,386
  46,555
  48,847
  51,266
  53,820
  56,512
  59,350
  62,341
  65,490
  68,807
  72,297
  75,970
  79,834
  83,898
Total liabilities, $m
  26,793
  27,275
  27,902
  28,619
  29,424
  30,317
  31,295
  32,361
  33,515
  34,758
  36,092
  37,519
  39,041
  40,663
  42,386
  44,214
  46,152
  48,203
  50,372
  52,664
  55,083
  57,637
  60,329
  63,167
  66,158
  69,307
  72,624
  76,114
  79,787
  83,651
  87,715
Total equity, $m
  4,310
  4,403
  4,505
  4,620
  4,750
  4,894
  5,052
  5,224
  5,411
  5,611
  5,827
  6,057
  6,303
  6,565
  6,843
  7,138
  7,451
  7,782
  8,132
  8,502
  8,893
  9,305
  9,740
  10,198
  10,681
  11,189
  11,724
  12,288
  12,881
  13,505
  14,161
Total liabilities and equity, $m
  31,103
  31,678
  32,407
  33,239
  34,174
  35,211
  36,347
  37,585
  38,926
  40,369
  41,919
  43,576
  45,344
  47,228
  49,229
  51,352
  53,603
  55,985
  58,504
  61,166
  63,976
  66,942
  70,069
  73,365
  76,839
  80,496
  84,348
  88,402
  92,668
  97,156
  101,876
Debt-to-equity ratio
  5.331
  5.330
  5.350
  5.370
  5.390
  5.410
  5.440
  5.460
  5.490
  5.510
  5.540
  5.560
  5.590
  5.610
  5.640
  5.660
  5.680
  5.700
  5.720
  5.750
  5.770
  5.780
  5.800
  5.820
  5.840
  5.850
  5.870
  5.880
  5.900
  5.910
  5.920
Adjusted equity ratio
  0.123
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,839
  1,495
  1,531
  1,569
  1,612
  1,660
  1,711
  1,768
  1,828
  1,893
  1,963
  2,039
  2,119
  2,203
  2,293
  2,388
  2,489
  2,595
  2,708
  2,827
  2,952
  3,085
  3,224
  3,371
  3,526
  3,689
  3,861
  4,042
  4,232
  4,432
  4,643
Depreciation, amort., depletion, $m
  1,328
  1,359
  1,390
  1,426
  1,466
  1,510
  1,559
  1,612
  1,669
  1,731
  1,798
  1,867
  1,942
  2,023
  2,109
  2,200
  2,296
  2,398
  2,506
  2,620
  2,741
  2,868
  3,002
  3,143
  3,291
  3,448
  3,613
  3,787
  3,970
  4,162
  4,364
Funds from operations, $m
  3,268
  2,854
  2,921
  2,995
  3,078
  3,170
  3,270
  3,380
  3,498
  3,625
  3,761
  3,906
  4,061
  4,226
  4,402
  4,588
  4,785
  4,993
  5,214
  5,447
  5,693
  5,952
  6,226
  6,514
  6,818
  7,138
  7,474
  7,829
  8,202
  8,594
  9,007
Change in working capital, $m
  -105
  -11
  -13
  -15
  -16
  -18
  -20
  -22
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
Cash from operations, $m
  3,373
  2,865
  2,933
  3,010
  3,095
  3,188
  3,290
  3,401
  3,521
  3,650
  3,788
  3,935
  4,092
  4,259
  4,437
  4,625
  4,824
  5,035
  5,258
  5,493
  5,742
  6,004
  6,280
  6,572
  6,879
  7,202
  7,542
  7,900
  8,276
  8,673
  9,089
Maintenance CAPEX, $m
  0
  -1,330
  -1,357
  -1,388
  -1,424
  -1,464
  -1,508
  -1,557
  -1,610
  -1,667
  -1,729
  -1,796
  -1,867
  -1,942
  -2,023
  -2,109
  -2,200
  -2,296
  -2,398
  -2,506
  -2,620
  -2,741
  -2,868
  -3,002
  -3,143
  -3,291
  -3,448
  -3,613
  -3,787
  -3,970
  -4,162
New CAPEX, $m
  -798
  -483
  -568
  -649
  -729
  -808
  -886
  -965
  -1,045
  -1,125
  -1,208
  -1,292
  -1,379
  -1,468
  -1,560
  -1,656
  -1,754
  -1,857
  -1,964
  -2,075
  -2,191
  -2,312
  -2,438
  -2,570
  -2,708
  -2,852
  -3,003
  -3,161
  -3,326
  -3,499
  -3,680
Cash from investing activities, $m
  -969
  -1,813
  -1,925
  -2,037
  -2,153
  -2,272
  -2,394
  -2,522
  -2,655
  -2,792
  -2,937
  -3,088
  -3,246
  -3,410
  -3,583
  -3,765
  -3,954
  -4,153
  -4,362
  -4,581
  -4,811
  -5,053
  -5,306
  -5,572
  -5,851
  -6,143
  -6,451
  -6,774
  -7,113
  -7,469
  -7,842
Free cash flow, $m
  2,404
  1,051
  1,008
  972
  942
  916
  896
  879
  866
  857
  851
  847
  846
  849
  853
  860
  870
  882
  896
  912
  931
  952
  975
  1,000
  1,028
  1,058
  1,091
  1,126
  1,164
  1,204
  1,247
Issuance/(repayment) of debt, $m
  216
  481
  627
  717
  805
  892
  979
  1,066
  1,154
  1,243
  1,334
  1,427
  1,523
  1,621
  1,723
  1,828
  1,938
  2,051
  2,169
  2,292
  2,420
  2,553
  2,693
  2,838
  2,990
  3,150
  3,316
  3,490
  3,673
  3,864
  4,064
Issuance/(repurchase) of shares, $m
  -256
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -507
  481
  627
  717
  805
  892
  979
  1,066
  1,154
  1,243
  1,334
  1,427
  1,523
  1,621
  1,723
  1,828
  1,938
  2,051
  2,169
  2,292
  2,420
  2,553
  2,693
  2,838
  2,990
  3,150
  3,316
  3,490
  3,673
  3,864
  4,064
Total cash flow (excl. dividends), $m
  1,897
  1,532
  1,636
  1,689
  1,747
  1,809
  1,875
  1,945
  2,020
  2,100
  2,185
  2,274
  2,369
  2,470
  2,576
  2,689
  2,807
  2,933
  3,065
  3,204
  3,350
  3,505
  3,667
  3,838
  4,018
  4,208
  4,407
  4,616
  4,837
  5,068
  5,312
Retained Cash Flow (-), $m
  161
  -93
  -101
  -116
  -130
  -144
  -158
  -172
  -186
  -201
  -215
  -230
  -246
  -262
  -278
  -295
  -313
  -331
  -350
  -370
  -391
  -412
  -435
  -458
  -483
  -508
  -535
  -563
  -593
  -624
  -656
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,439
  1,535
  1,573
  1,617
  1,664
  1,717
  1,773
  1,834
  1,899
  1,969
  2,044
  2,123
  2,208
  2,298
  2,394
  2,495
  2,602
  2,715
  2,834
  2,960
  3,093
  3,233
  3,380
  3,536
  3,699
  3,872
  4,053
  4,244
  4,444
  4,656
Discount rate, %
 
  11.60
  12.18
  12.79
  13.43
  14.10
  14.80
  15.55
  16.32
  17.14
  18.00
  18.90
  19.84
  20.83
  21.87
  22.97
  24.12
  25.32
  26.59
  27.92
  29.31
  30.78
  32.32
  33.93
  35.63
  37.41
  39.28
  41.25
  43.31
  45.47
  47.75
PV of cash for distribution, $m
 
  1,290
  1,219
  1,097
  977
  861
  750
  645
  547
  457
  376
  305
  242
  189
  144
  108
  79
  56
  39
  26
  17
  11
  7
  4
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Simon Property Group, Inc. is an equity real estate investment trust. The firm invests in the real estate markets across the globe. It engages in investment, ownership, management, and development of properties. It primarily invests in regional malls, premium outlets, mills, and community/lifestyle centers to create its portfolio. Simon Property Group, Inc. was founded in 1960 and is based in Indianapolis, Indiana, with additional office in New York, New York.

FINANCIAL RATIOS  of  Simon Property Group (SPG)

Valuation Ratios
P/E Ratio 26.1
Price to Sales 8.8
Price to Book 11.2
Price to Tangible Book
Price to Cash Flow 14.3
Price to Free Cash Flow 18.7
Growth Rates
Sales Growth Rate 3.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.8%
Cap. Spend. - 3 Yr. Gr. Rate -1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 533.1%
Total Debt to Equity 533.1%
Interest Coverage 3
Management Effectiveness
Return On Assets 8.8%
Ret/ On Assets - 3 Yr. Avg. 8.6%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 6.3%
Return On Equity 41.9%
Return On Equity - 3 Yr. Avg. 35.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 82.1%
Gross Margin - 3 Yr. Avg. 81.9%
EBITDA Margin 80%
EBITDA Margin - 3 Yr. Avg. 80.9%
Operating Margin 49.1%
Oper. Margin - 3 Yr. Avg. 50.6%
Pre-Tax Margin 39.3%
Pre-Tax Margin - 3 Yr. Avg. 37.7%
Net Profit Margin 33.8%
Net Profit Margin - 3 Yr. Avg. 32.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 110.8%

SPG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SPG stock intrinsic value calculation we used $5435 million for the last fiscal year's total revenue generated by Simon Property Group. The default revenue input number comes from 2016 income statement of Simon Property Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SPG stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.6%, whose default value for SPG is calculated based on our internal credit rating of Simon Property Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Simon Property Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SPG stock the variable cost ratio is equal to 46.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SPG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.9% for Simon Property Group.

Corporate tax rate of 27% is the nominal tax rate for Simon Property Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SPG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SPG are equal to 445.5%.

Life of production assets of 18.2 years is the average useful life of capital assets used in Simon Property Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SPG is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4310 million for Simon Property Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 316.513 million for Simon Property Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Simon Property Group at the current share price and the inputted number of shares is $48.6 billion.

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COMPANY NEWS

▶ High-profile Galleria restaurants to cost $11M to build   [04:05PM  American City Business Journals]
▶ Stocks That Fell to 3-Year Lows in the Week of August 11   [Aug-13-17 12:49PM  GuruFocus.com]
▶ [$$] Mall Owners Wave a Finger: Were Not Dead Yet   [Aug-09-17 12:49AM  The Wall Street Journal]
▶ Simon Property Compared to Its Peers after 2Q17   [Aug-08-17 08:07AM  Market Realist]
▶ [$$] Big Mall Operators Defy Industry's Gloom   [07:37AM  The Wall Street Journal]
▶ Did Simon Property Reward Stockholders Generously in 2Q17?   [Aug-07-17 10:37AM  Market Realist]
▶ What's changed at the Folsom Premium Outlets   [Aug-04-17 06:15PM  American City Business Journals]
▶ Realty Income Corp (O) Stock Isnt Convincing   [Aug-02-17 01:19PM  InvestorPlace]
▶ Simon Property reports 2Q results   [Aug-01-17 09:36PM  Associated Press]
▶ What Analysts Think of Simon Property ahead of 2Q17   [Jul-28-17 09:06AM  Market Realist]
▶ Mall Owners Comp Cut Amid Retail Rubble   [01:08AM  The Wall Street Journal]
▶ What to Expect from Simon Property in 2Q17   [02:21PM  Market Realist]
▶ [$$] Mall Owners' Comp Cut Amid Retail Rubble   [01:15PM  The Wall Street Journal]
▶ [$$] Mall Owners' Comp Cut Amid Retail Rubble   [11:12AM  The Wall Street Journal]
▶ 3 Quality Mall REITs To Buy   [Jul-24-17 07:00AM  Forbes]
▶ Lululemon Athletica and Toms outlet stores coming to Houston   [Jul-18-17 04:55PM  American City Business Journals]
▶ Sink or Swim: Malls fail despite upgrades   [Jul-05-17 02:12PM  Yahoo Finance Video]
▶ Simon Opens Norfolk Premium Outlets®   [09:45AM  PR Newswire]
▶ A Technical Look at the Real Estate Sector   [03:23AM  Investopedia]
▶ Goldman: buy this beaten-down REIT   [Jun-20-17 01:39PM  CNBC Videos]
▶ Top REIT ETFs Show Similarities, Differences   [Jun-08-17 04:14PM  ETF.com]
▶ 52-Week Company Lows   [Jun-01-17 12:17PM  GuruFocus.com]
▶ [$$] Simon Property Group to Invest $1 Billion to Redevelop Mall Assets   [May-24-17 12:26AM  The Wall Street Journal]
▶ Simon Property Group Sells $1.35 Billion Of Senior Notes   [May-22-17 05:51PM  PR Newswire]
▶ Simon Property Group Can Give Steady Returns   [07:36AM  Market Realist]
▶ 5 Top Retail REIT Stocks to Buy in 2017   [May-19-17 03:53PM  Motley Fool]
Stock chart of SPG Financial statements of SPG
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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