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Why Is Macerich (MAC) Up 38.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Macerich (MAC - Free Report) . Shares have added about 38.2% in that time frame, outperforming the S&P 500.

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

Macerich Q1 FFO Misses Estimate, NOI Fall Y/Y

Macerich delivered FFO per share of 45 cents, excluding financing expenses in relation to Chandler Freehold, which marginally missed the Zacks Consensus Estimate of 46 cents. The figure also plunged 44.4% year over year.

The company generated revenues of $190.4 million in the first quarter of 2021. The figure declined 16% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $189.3 million.

The relaxation of government-mandated restrictions and high levels of vaccinations across the United States have resulted in significant improvement in sales and traffic across the company’s portfolio. In fact, in first-quarter 2021, comparable tenant sales across its portfolio were only 2% less than pre-pandemic levels in first-quarter 2019.

Moreover, the company’s rental collections remain strong at 95% and 97% of rents received for first-quarter 2021 and fourth-quarter 2020, respectively.

Behind the Headlines

At Mar 31, 2021, portfolio occupancy was 88.5%, declining from 89.7% at Dec 31, 2020. The company anticipates this to be the lowest level for post-pandemic occupancy.

Also, same-center NOI (excluding lease termination income) slump 29% to $153.5 million from the prior-year number, owing to COVID-related rent abatements and occupancy erosion.

Nonetheless, as of Mar 31, 2021, average rent per square foot rose 1.6% year over year to $62.44. In the March-end quarter, Macerich signed 181 leases for 700,000 square feet of space, which almost reached leasing activity levels of first-quarter 2020.

As of Mar 31, 2021, it had cash and cash equivalents of $1.08 billion.

Guidance

Assuming no further government-mandated shutdowns of its retail properties, the company reaffirmed 2021 FFO per share at $1.77-$1.97.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Macerich has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Macerich has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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