Simon Property Group, Inc.SPGNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $301.46 per share(market-calibrated)

+49.8%

Upside to Fair Value

Current

$201.30

Pure Model

$314.55

Fair Value

$301.46

Bull Case

$426.83

Bear Case

$220.05

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $314.55.

What's Driving This Ratingfor SPG

↓

CapEx normalizing toward maintenance

Historical CapEx is 11.44% of revenue (heavy investment phase). Model fades this to 2.50% by Year 10, freeing up ~$1.0B in annual FCF. This is the biggest driver of long-term cash flow improvement.

✓

Premium margins already priced in

EBIT margin of 71.05% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects -2.43% revenue growth, fading to 2.50% by Year 10. Revenue reaches $11.7B (vs $6.4B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 92.81% indicates efficient cash generation. FCF reaches $9.5B by Year 10 (81.22% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.40

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.78%

Cost of Debt

Pre-tax Cost of Debt2.94%

Tax Rate5.00%

After-tax Cost of Debt2.79%

Equity Weight (E/V)69.22%

Debt Weight (D/V)30.78%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (69.22% × 10.78%) + (30.78% × 2.79%)

= 8.32%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$6.2B	$6.8B	$8.4B	$10.2B	$11.7B
EBIT	$4.4B	$4.9B	$5.9B	$7.2B	$8.3B
Tax	$221M	$243M	$297M	$362M	$416M
NOPAT	$4.2B	$4.6B	$5.6B	$6.9B	$7.9B
+ Depreciation	$1.0B	$1.1B	$1.4B	$1.7B	$1.9B
- Capex	$710M	$647M	$624M	$558M	$293M
- Δ NWC	-$15M	$40M	$101M	$86M	$29M
Free Cash Flow	$4.5B	$5.1B	$6.3B	$7.9B	$9.5B
Discount Factor	0.923	0.787	0.670	0.571	0.450
Present Value	$4.2B	$4.0B	$4.2B	$4.5B	$4.3B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$9.5B

Terminal Growth Rate2.50%

WACC8.32%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$167.4B

PV of Terminal Value$75.3B

Exit Multiple Method

Year 10 EBITDA$10.3B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$225.5B

PV of Terminal Value$101.4B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$42.6B

PV of Terminal Value$75.3B

Enterprise Value$117.9B

(-) Net Debt$28.4B

Equity Value$89.5B

Shares Outstanding326M

Price per Share$274.52

Exit Multiple Method

PV of Projected FCFs$42.6B

PV of Terminal Value$101.4B

Enterprise Value$144.0B

(-) Net Debt$28.4B

Equity Value$115.6B

Shares Outstanding326M

Price per Share$354.58

Pure Model Fair Value

$314.55

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
6.32%	$411.83	$431.98	$457.40	$490.46	$535.25
7.32%	$346.66	$359.12	$374.16	$392.68	$416.04
8.32%	$296.67	$304.90	$314.55	$326.01	$339.85
9.32%	$256.57	$262.28	$268.82	$276.40	$285.28
10.32%	$223.39	$227.49	$232.12	$237.38	$243.41

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$220.05

9.3% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.74

Base Case

$314.55

56.3% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.40

Bull Case

$426.83

112.0% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 1.19

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Real Estate Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-2.43%

Year 3 Revenue Growth6.28%

Year 5 Revenue Growth13.78%

Year 7 Revenue Growth9.27%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin71.05%

Tax Rate5.00%

Historical Capex / Rev11.44%

Terminal Capex / Rev2.50%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 22x EV/EBITDA (Real Estate sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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