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Simon Property Group, Inc. (SPG) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Simon Property Group, Inc. (SPG)

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Intrinsic Value (DCF)

Current$182.31
→
Intrinsic$152.39
-16%
$78.90$152.39$298.69
Market implies 11% growth for 5 years
SPG trades at a premium to our conservative estimate — investors expect above-average performance.
At $182, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $79 → Bull $299. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$202$227$254$283
10%$118$134$152$172
12%$73$85$99$113
14%$45$55$65$76

Bull Case

  • Bull case ($299) offers 64% upside at 10% growth, 8% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($79) implies 57% downside at 6% growth, 12% discount
  • Price reflects 11% growth expectations vs 8% historical — high bar to clear
  • Trading 16% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$4.03B
Year 2$4.35B
Year 3$4.70B
Year 4$5.08B
Year 5$5.48B
Terminal$86.86B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$3.73BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is SPG stock undervalued or overvalued?
🔴 OVERVALUED

SPG trades at $182.31 vs. our DCF-derived intrinsic value of $152.39, implying -18% downside. Using a 9.5% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($241.75) suggests limited upside.

What is SPG's intrinsic value?

Using a 5-year DCF model: Base FCF of $3.73B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $23.38B net debt and dividing by 0.33B shares: Bear $87.81 | Base $152.39 | Bull $241.75. Current price $182.31 implies -18% to base case.

How is SPG's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($73.08B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 19.6x.