UPDATE: Stifel Reiterates on Simon Property Group as Portfolio Growth Shows No Signs of Slowing

In a report published Wednesday, Stifel analyst Nathan Isbee reiterated a Buy rating on Simon Property Group (NYSE: SPG), and raised the price target from $175.00 to $180.00.

In the report, Stifel noted, “We believe Simon's best-in-class regional mall and outlet center portfolio is well-positioned as the retail landscape continues to evolve and questions regarding the future of bricks & mortar retail swirl around the industry. While sales growth was modest in 1Q, Simon's core portfolio fundamentals are strong in our view, and should generate above-average growth in 2014.

"The REIT is focused on driving stronger internal growth in the future by replacing underperforming retailers with higher quality retailers at better rents and executing on its multi-billion dollar development/redevelopment pipeline funded by what we view as a fortress like balance sheet. Simon raised its 2014 FFO guidance to $9.60-$9.70 and increased its dividend 4%, a reflection of the strong mall fundamentals.

"Simon's spin-off of 44 smaller, lower productivity malls and its shopping center portfolio to a new REIT, Washington Prime Group, is on track for a 2Q14 completion, which should further enhance Simon's already strong growth profile. We maintain our Buy rating and increase our target price to $180 based on a 5% discount to our $188 NAV estimate at a 5% cap rate.”

Simon Property Group closed on Tuesday at $170.64.