It has been about a month since the last earnings report for Macerich (MAC). Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Macerich due for a breakout? 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 drivers.
Macerich's Q1 FFO Meets Estimates, Leasing Revenues Dip
Macerich delivered first-quarter 2019 FFO per share, excluding loss on extinguishment of debt, of 81 cents, in line with the Zacks Consensus Estimate. The figure compares unfavorably with the prior-year quarter’s reported tally of 82 cents.
The company witnessed an uptick in occupancy and mall tenant annual sales in the first quarter. Nonetheless, results suggested a decline in leasing revenues.
In fact, the company posted leasing revenues of $211 million in the quarter, missing the Zacks Consensus Estimate of $205.5 million. The figure, however, comes in 3.3% lower than the prior-year quarter’s reported number.
Quarter in Detail
As of Mar 31, 2019, mall portfolio occupancy expanded 70 basis points (bps) year over year to 94.7%. Mall tenant annual sales for the 12-month period ended Mar 31, 2019 increased 8.7% year over year to $746 per square feet. Re-leasing spreads for the 12-month period ended Mar 31, 2019, increased 11%. Average rent per square foot ascended 3.9% to $60.74 from $58.44 as of Mar 31, 2018.
Also, same-center net operating income (excluding lease termination revenue) inched up 1.7% to approximately $209 from the prior-year quarter.
Moreover, Macerich reiterated its guidance for 2019. The REIT expects FFO per share of $3.50-3.58, and $3.65-$3.73 (excluding impact of ASC 842).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
Currently, Macerich has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
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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