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Macerich (MAC) Down 3.1% Since Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Macerich Company (The) (MAC - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Macerich Q4 FFO Top Estimates, Revenues Decline Y/Y

Macerich came up with fourth-quarter 2016 FFO per share of $1.17, which came $0.01 above the Zacks Consensus Estimate and $0.05 ahead of the prior-year quarter tally of $1.12. Results were driven by improvement in releasing spread and same center net operating income.

The company posted revenues of $272.0 million for the quarter, surpassing the Zacks Consensus Estimate $262 million. Revenues were $320.8 million in the prior-year quarter.

For full-year 2016, Macerich reported FFO per share of $4.08, which was well above the year-ago tally of $3.81. However, total revenue came in at $1.04 billion, which marked a 19.2% contraction from the prior year.

Quarter in Detail

As of Dec 31, 2016, mall portfolio occupancy contracted 70 basis points (bps) year over year to 95.4%. Mall tenant annual sales decreased to $630 per square foot from $635 at the end of fourth-quarter 2015. However, re-leasing spreads rose 17.7% on a year-over-year basis. Furthermore, same centers net operating income grew around 2.1% from the prior-year period.

As of Dec 31, 2016, Macerich’s cash and cash equivalents were $94.0 million, up from $84.2 million as of Sep 30, 2016.

2017 Guidance

Macerich has provided its guidance for 2017. The retail REIT projects FFO per share in a range of $3.90–$4.00 for the year.

The company anticipates 2017 cash same store NOI to grow 3.0–4.0%. Moreover, the guidance includes a dilution of $0.08 per share due to the Jan 2017 sale of Northgate Mall, Cascade Mall as well as an additional non-core asset presently under contract.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend for fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted 10.29% downward due to these changes.

VGM Scores

At this time, Macerich Company's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift.  It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.


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