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Why Is Macerich (MAC) Up 67.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Macerich (MAC - Free Report) . Shares have added about 67.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Macerich Q3 FFO & Revenues Lag Estimates
Macerich reported adjusted FFO per share of 52 cents, which missed the Zacks Consensus Estimate of 54 cents. The figure also plunged 50% year over year. Adjusted FFO per share for the quarter excludes financing expense in relation to Chandler Freehold and loss on extinguishment of debt.
During the quarter, Macerich endured downside in mall tenant annual sales and portfolio occupancy amid the pandemic-borne concerns. This affected same-center net operating income (NOI).
The company generated revenues of $185.8 million in the September-end quarter. The figure declined 19.6% year on year and missed the Zacks Consensus Estimate of $201.9 million.
The company noted that all of its properties were open as of Oct 7. Widespread reopening of malls has driven sequential improvement in rent collections and progress on negotiations with retail tenants.
In fact, Macerich is seeing an improvement in rental receipts, and has collected roughly 80% and 81% of billings in third-quarter and October, respectively. This compares favorably with second-quarter rent collections of 61%.
It has slashed the planned 2020 development expends by roughly $100 million though work continues on some select projects.
Behind the Headlines
As of Sep 30, 2020, average rent per square foot rose 1.8% to $62.29 from $61.16 as of Sep 30, 2019. Mall tenant annual sales for the 12-month period ended Sep 30, 2020 decreased to $718 per square feet from $800 for the 12-month period ended Sep 30, 2019. Notably, the sales metric excludes the period of coronavirus closure for each tenant.
Moreover, as of Sep 30, 2020, the mall portfolio occupancy (including closed centers) shrunk 50 basis points sequentially to 90.8%. Also, same-center NOI (excluding lease termination income) slump 29.3% to $152.4 million from the prior-year number.
It exited third-quarter 2020 with $630 million of cash and cash equivalents on its balance sheet, higher than $573 million at second-quarter end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Macerich has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 has been net zero. It's no surprise Macerich has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Macerich (MAC) Up 67.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Macerich (MAC - Free Report) . Shares have added about 67.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Macerich Q3 FFO & Revenues Lag Estimates
Macerich reported adjusted FFO per share of 52 cents, which missed the Zacks Consensus Estimate of 54 cents. The figure also plunged 50% year over year. Adjusted FFO per share for the quarter excludes financing expense in relation to Chandler Freehold and loss on extinguishment of debt.
During the quarter, Macerich endured downside in mall tenant annual sales and portfolio occupancy amid the pandemic-borne concerns. This affected same-center net operating income (NOI).
The company generated revenues of $185.8 million in the September-end quarter. The figure declined 19.6% year on year and missed the Zacks Consensus Estimate of $201.9 million.
The company noted that all of its properties were open as of Oct 7. Widespread reopening of malls has driven sequential improvement in rent collections and progress on negotiations with retail tenants.
In fact, Macerich is seeing an improvement in rental receipts, and has collected roughly 80% and 81% of billings in third-quarter and October, respectively. This compares favorably with second-quarter rent collections of 61%.
It has slashed the planned 2020 development expends by roughly $100 million though work continues on some select projects.
Behind the Headlines
As of Sep 30, 2020, average rent per square foot rose 1.8% to $62.29 from $61.16 as of Sep 30, 2019. Mall tenant annual sales for the 12-month period ended Sep 30, 2020 decreased to $718 per square feet from $800 for the 12-month period ended Sep 30, 2019. Notably, the sales metric excludes the period of coronavirus closure for each tenant.
Moreover, as of Sep 30, 2020, the mall portfolio occupancy (including closed centers) shrunk 50 basis points sequentially to 90.8%. Also, same-center NOI (excluding lease termination income) slump 29.3% to $152.4 million from the prior-year number.
It exited third-quarter 2020 with $630 million of cash and cash equivalents on its balance sheet, higher than $573 million at second-quarter end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Macerich has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 has been net zero. It's no surprise Macerich has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.