Shares of The Macerich Company (MAC) touched a new 52-week high of $84.77 on Dec 29. However, the stock closed the session at $84.00, reflecting a solid return of 47.0% in a year’s time. The trading volume for the session was 645,276 shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock still has plenty of upside left, given the positive estimate revisions it witnessed over the past 30 days. Further, the expected long-term earnings per share growth rate for this retail real estate investment trust (“REIT”) now stands at 5.1%.
Growth Drivers
Macerich focuses on acquiring premium malls in some of the vibrant U.S. markets. Further, the presence of a cluster of well-capitalized industry-leading tenants keeps the company’s growth momentum alive. In November, Macerich gained ownership of five premium malls for $1.89 billion. This acquisition is expected to boost the company’s mall tenant sales, going forward.
On Oct 28, Macerich reported third-quarter 2014 funds from operations (“FFO”) of 88 cents per share, which missed the Zacks Consensus Estimate by a penny, but came 2 cents above the prior-year quarter figure. Results were attributable to higher mall tenant annual sales and rise in same centers net operating income (“NOI”). In fact, mall tenant annual sales for the third quarter rose 4% year over year to $571 per square foot.
Echoing similar sentiments, the Zacks Consensus Estimate for both 2014 and 2015 moved north. Specifically, over the last 30 days, the estimate for 2014 edged up 0.3% to $3.59 per share, while that for 2015 advanced 0.5% to $3.86 per share.
Other Stocks to Consider
Other top-ranked stocks in this space include American Assets Trust, Inc. (AAT), CBL & Associates Properties Inc. (CBL) and Kimco Realty Corporation (KIM). All these stocks hold a Zacks Rank #2, same as Macerich.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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