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Analyst Blog

On Mar 21, shares of The Macerich Company (MAC - Analyst Report) – a real estate investment trust (REIT) – soared to touch a 52-week high of $62.94, as it gained momentum following its strong fourth-quarter 2012 results.

The closing price of Macerich on Mar 21, 2013, was $62.43, representing a solid year-to-date return of 7.2%. The average trading volume over the last 3 months was 0.4 million shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given its estimate revisions over the last 30 days.

Growth Drivers

Macerich reported robust fourth-quarter 2012 results with core FFO and revenues surpassing the Zacks Consensus Estimate. Successful implementation of its strategic plan, which led to a concentration of company’s solid portfolio of A-quality malls across the most attractive U.S. markets, was the major growth driver. Moreover, the acquisition of upscale properties – such as Green Acres Mall and Kings Plaza – during the quarter further strengthened its portfolio.

On Feb 6, Macerich’s fourth-quarter 2012 FFO (funds from operations) per share came in at 90 cents, beating the Zacks Consensus Estimate as well as the year-ago FFO by 3 cents. For full-year 2012, core FFO per share escalated 10.4% year over year to $3.18 and exceeded the Zacks Consensus Estimate of $3.04. The remarkable results were aided by strong fundamentals in the portfolio with solid tenant sales, leasing growth and occupancy gains.

Notably, Macerich has delivered strong earnings surprises in 4 straight quarters with an average beat of 6.40%.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for full-year 2013 has been revised marginally upward to $3.38 per share. On the other hand, the Zacks Consensus Estimate for full-year 2014 has remained unchanged at $3.57 per share.

On Mar 21, a number of REITs crafted 52-week highs. This includes Plum Creek Timber Co. Inc. (PCL - Analyst Report), Health Care REIT, Inc. (HCN - Analyst Report) and BioMed Realty Trust Inc. (BMR - Snapshot Report).

Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.