Shares of The Macerich Company MAC have gained 16.2% over the past six months, outperforming the industry's 1.9% decline.
This retail real estate investment trust (REIT) enjoys a portfolio of premium shopping centers in the United States. Its focus on omnichannel retailing is likely to support its long-term growth. The aggressive capital-recycling program will lower its leverage and enable it to invest in higher-growth properties.
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Let us decipher the possible factors behind the surge in the stock price for this Zacks Rank #3 (Hold) company.
Macerich has a high concentration of premium malls in vibrant U.S. markets. These properties are located in densely populated areas, where affluent consumers with significant disposable incomes live, offering the company a solid scope to generate decent cash flows. We expect MAC’s total revenues to increase by 12.7% in 2025.
Macerich has been making efforts to enhance its asset quality as well as customer relationships through increasing the adoption of the omnichannel model. The omnichannel business model has become crucial among several retail stores that are resorting to fulfilling orders out of their mall-based stores.
Further, Macerich’s shift toward reuse and mixed-use properties through recapturing and repositioning of anchor tenants remains a key emphasis. Bringing brands to new markets at its mall attracts shoppers.
Macerich has been focusing on an aggressive capital-recycling program. It involves the divestiture of non-core and slower-growth assets and the use of the proceeds to increase its presence in core markets and invest in higher-growth properties through acquisitions, developments and redevelopment initiatives.
With the above-mentioned factors, the rising trend in the stock is expected to continue in the near term.
Risks Likely to Affect MAC’s Positive Trend
The growing adoption of online shopping may adversely impact the company’s market share for brick-and-mortar stores. Potential tenant bankruptcies are likely to affect Macerich’s performance in the upcoming quarters. Moreover, a substantially leveraged balance sheet and high interest expenses remain concerns.
Stocks to Consider
Some better-ranked stocks from the retail REIT sector are Philips Edison & Company PECO and EPR Properties EPR, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for PECO’s 2025 FFO per share has moved a cent northward to $2.58 over the past two months.
The consensus estimate for EPR’s 2025 FFO per share has moved 3 cents upward to $5.10 over the past month.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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Download Atomic Opportunity: Nuclear Energy's Comeback free today.Macerich Company (The) (MAC) : Free Stock Analysis Report
EPR Properties (EPR) : Free Stock Analysis Report
Phillips Edison & Company, Inc. (PECO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
