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Macerich Company (MAC)
NYSE:MAC
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Macerich
(NYSE:MAC)52Neutral
Positive Factors
Financial Performance
Net debt to EBITDA has decreased to 7.99x from 8.23x, indicating progress on financial goals.
Transformation Process
Macerich Company made further progress on its Path-forward transformation process, including the sale of Southridge for net proceeds of $4 million and Wilton Mall under contract for $25 million.
Negative Factors
Interest Costs
Rising interest costs may be the largest headwind to achieving $1.80 of FFO in the next 3-4 years.
Macerich (MAC) vs. S&P 500 (SPY)
Market Cap
$4.67B
Dividend Yield3.69%
Average Volume (3M)1.89M
Price to Earnings (P/E)―
Beta (1Y)1.80
Revenue Growth4.88%
EPS Growth-66.88%
CountryUS
Employees655
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)-1.09
Shares Outstanding252,496,870
10 Day Avg. Volume2,737,805
30 Day Avg. Volume1,894,542
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.26
Price to Cash Flow (P/CF)11.60
P/FCF Ratio8.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.47Price Target Upside12.66% Upside
Rating ConsensusHold
Number of Analyst Covering10
Macerich Business Overview & Revenue Model
Company DescriptionMacerich Co. operates as a real estate investment trust, which engages in the acquisition, ownership, development, redevelopment, management and leasing of regional and community shopping centers located throughout the United States. It conducts all of its operations through the operating partnership and the management companies. The company was founded by Mace Siegel, Dana K. Anderson, Arthur M. Coppola and Edward C. Coppola in 1964 and is headquartered in Santa Monica, CA.
How the Company Makes MoneyMacerich generates revenue primarily through leasing space in its shopping centers to a diverse range of retail tenants. The company earns rental income from long-term lease agreements with retailers, which can include fixed base rents, percentage rents based on tenant sales, and reimbursement of property operating expenses. Additionally, Macerich benefits from ancillary income streams such as parking fees, advertising, and sponsorships within its properties. The company's strategic focus on high-traffic, affluent markets helps maximize occupancy rates and rental rates, contributing to its financial performance. Macerich also engages in redevelopment projects to enhance and modernize its properties, which can increase property value and attract premium tenants. Partnerships with leading retailers and brands further bolster Macerich's market presence and revenue potential.
Macerich Financial Statement Overview
Summary
Macerich has maintained high gross margins, but persistent net losses and zero cash flow generation highlight challenges in profitability and liquidity. The elimination of debt in 2024 improved leverage metrics, but the lack of cash flow and continued net losses suggest operational adjustments are necessary.Income Statement
Macerich shows a mixed performance in terms of profitability. The Gross Profit Margin has remained strong, with 95.5% in 2024, but the company has struggled with net profitability, as evidenced by consecutive net losses. Revenue growth was minimal at 4.2% from 2023 to 2024, suggesting limited top-line expansion. Despite strong EBIT and EBITDA margins in 2024 (66.6% and 98.7% respectively), the net income remains negative, indicating challenges in managing costs or debt-associated expenses.65
Positive
Balance Sheet
The balance sheet reflects a solid equity base with an equity ratio of 32.2% in 2024, showing reliance on equity financing. However, the Debt-to-Equity ratio improved significantly to 0.00 due to zero debt reported in 2024, which may indicate strategic deleveraging. Return on Equity is negative, highlighting profitability issues despite improved equity standing.58
Neutral
Cash Flow
Cash flow metrics indicate some concerns. Operating Cash Flow to Net Income ratio could not be assessed since Operating Cash Flow was zero in 2024. Free Cash Flow growth cannot be determined due to zero Free Cash Flow reported. This lack of operational cash flow and free cash flow points to potential liquidity management issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 918.20M | 881.37M | 859.16M | 847.44M | 786.03M | Gross Profit |
| 876.86M | 486.48M | 468.81M | 466.55M | 438.05M | EBIT |
| 4.84M | 0.00 | 144.78M | 141.06M | -102.25M | EBITDA |
| 326.90M | 190.72M | 436.39M | 452.19M | 155.70M | Net Income Common Stockholders |
| -194.12M | -274.06M | -65.08M | 14.26M | -245.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 89.86M | 94.94M | 100.32M | 112.45M | 465.30M | Total Assets |
| 8.57B | 7.51B | 8.09B | 8.35B | 9.18B | Total Debt |
| 5.06B | 4.31B | 4.50B | 4.61B | 6.13B | Net Debt |
| -89.86M | 4.21B | 4.40B | 4.50B | 5.66B | Total Liabilities |
| 5.72B | 4.99B | 5.14B | 5.17B | 6.74B | Stockholders Equity |
| 2.76B | 2.45B | 2.87B | 3.05B | 2.26B |
| Cash Flow | Free Cash Flow | |||
| 283.44M | 295.50M | 239.61M | 175.44M | 53.32M | Operating Cash Flow |
| 283.44M | 295.50M | 337.51M | 286.37M | 124.84M | Investing Cash Flow |
| 19.79M | 52.54M | -1.40M | 234.97M | -202.85M | Financing Cash Flow |
| -316.05M | -338.89M | -321.94M | -837.02M | 446.45M |
Macerich Technical Analysis
Negative
18.17
Price Trends
19.86
Negative
19.63
Negative
17.44
Positive
Market Momentum
-0.55
Positive
36.52
Neutral
25.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAC, the sentiment is Negative. The current price of 18.17 is below the 20-day moving average (MA) of 19.69, below the 50-day MA of 19.86, and above the 200-day MA of 17.44, indicating a neutral trend. The MACD of -0.55 indicates Positive momentum. The RSI at 36.52 is Neutral, neither overbought nor oversold. The STOCH value of 25.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MAC.
Macerich Risk Analysis
Macerich disclosed 36 risk factors in its most recent earnings report. Macerich reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Macerich Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $69.22B | 24.33 | <0.01% | 4.41% | 5.40% | 8.57% | |
72 Outperform | $8.89B | 30.11 | 9.31% | 4.25% | 6.21% | 22.32% | |
72 Outperform | $882.60M | 22.32 | 14.81% | 6.42% | 4.64% | -5.26% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
56 Neutral | $929.01M | 16.10 | 16.65% | 5.33% | -3.68% | 990.23% | |
52 Neutral | $4.67B | ― | -7.04% | 3.69% | 4.88% | -66.88% |
* Real Estate Sector Average
Performance Comparison
MAC
Macerich
18.17
2.81
18.29%
BFS
Saul Centers
36.49
0.87
2.44%
SPG
Simon Property
183.38
38.49
26.56%
FRT
Federal Realty
103.54
5.82
5.96%
CBL
CBL & Associates Properties
30.24
8.27
37.64%
Macerich Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -8.83% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects positive progress in business simplification, leasing performance, and traffic recovery. However, challenges remain with a decrease in FFO and same-center NOI, alongside higher capital costs. The company is on track with its strategic initiatives and has a clear path forward.Highlights
Successful Business Simplification
The company successfully simplified its business by consolidating joint venture interests at key locations and de-risked through an equity offering. Refinancing of Queens Center was achieved well below target rates.
Strong Leasing Performance
In 2024, achieved 8.8% base rent releasing spreads for permanent tenants under 10,000 square feet, with new leases signed during this period at 17.6% higher base rent versus the prior period.
Improved Portfolio Traffic
Traffic for the year was up almost 2% compared to 2023, and portfolio traffic is back to pre-COVID levels.
Portfolio Occupancy Increase
Fourth quarter occupancy was 94.1%, up 40 basis points from the third quarter and 60 basis points from the previous year.
Significant Liquidity and Debt Reduction
The company has approximately $683 million of liquidity, and reduced debt to EBITDA to slightly below 8x, with a strategy to further reduce leverage to the low to mid 6x range.
Lowlights
Decrease in FFO
FFO for Q4 2024 was $117 million, down from $128 million in Q4 2023, driven by higher interest expense and severance costs.
Same-Center NOI Decline
Same-center NOI excluding lease termination income decreased 0.4% in Q4 2024 compared to Q4 2023.
Higher Capital Costs
Anticipated landlord work and tenant allowance costs were higher than expected due to the percentage of new tenants targeted for leasing.
Company Guidance
During the Macerich Fourth Quarter 2024 Earnings Conference Call, the company provided comprehensive guidance on its strategic Path-Forward Plan aimed at simplifying the business, improving operational performance, and reducing leverage over a five-year horizon. Key metrics highlighted include targeting an average of 4 million square feet of leasing annually in 2025 and 2026, up from 3.75 million square feet in previous years, with a focus on increasing the percentage of new lease deals. The company achieved an 8.8% base rent releasing spread for permanent tenants under 10,000 square feet, with new leases signed at a 17.6% higher base rent than prior periods. Macerich is also targeting an 89% physical permanent occupancy rate by 2028, up from the current 84%, with a signed-not-open (SNO) pipeline of $66 million. The call also detailed progress in refinancing efforts, with the Queens Center refinance at a favorable 5.4% fixed interest rate, and Macerich's debt to EBITDA decreasing to just below 8x. The guidance underscores a strategic shift to longer-term leasing planning and an increase in operational efficiencies through new technological and organizational enhancements.Macerich Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Macerich Advances Path Forward Plan with Key Acquisitions
Neutral
Feb 27, 2025
In the fourth quarter of 2024, Macerich made significant strides in executing its Path Forward Plan, which includes simplifying its business, improving operational performance, and reducing leverage. The company acquired a 40% interest in the Pacific Premier Retail Trust portfolio for $122 million, completed a public offering of 23 million shares raising approximately $454 million, and sold several properties to improve its balance sheet. Despite a net loss of $211.2 million for the quarter, Macerich maintained a strong leasing performance with a portfolio occupancy of 94.1% and signed leases for 3.7 million square feet of space throughout the year.
Executive/Board ChangesBusiness Operations and Strategy
Macerich Expands Board with Experienced New Director
Positive
Jan 24, 2025
On January 17, 2025, Macerich announced the election of Devin I. Murphy to its Board of Directors, effective February 1, 2025, expanding the Board to nine members. Mr. Murphy brings extensive experience from his previous roles at Phillips Edison & Company and in investment banking, which aligns with Macerich’s ‘Path Forward’ plan aimed at improving operational performance and enhancing shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.