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On Tuesday, Mizuho (NYSE:MFG) Securities analyst Haendel St. Juste provided an updated perspective on The Macerich Company (NYSE:MAC), raising the stock rating from Neutral to Outperform, albeit with a reduced price target of $18, down from the previous $22. The adjustment comes in light of Macerich’s recent performance and the potential that the analyst sees in the company’s future. Currently trading at $16.43 with a market capitalization of $4.16 billion, the company has maintained dividend payments for 32 consecutive years, currently offering a 4.14% yield.
St. Juste pointed out that Macerich’s stock offers a compelling risk/reward balance for investors who are willing to embrace volatility. This viewpoint is supported by the stock’s year-to-date underperformance of -15.87% and its high beta of 2.14, confirming InvestingPro’s analysis that stock price movements are quite volatile. According to the analyst, this positions Macerich as a potentially attractive investment opportunity, though InvestingPro’s Fair Value analysis suggests the stock is slightly overvalued at current levels.
The analyst’s optimism is further bolstered by the company’s progress under new leadership. Macerich’s management team has surpassed the objectives outlined in its ’Path Forward Plan’ initiated in Spring 2024. The company has made significant strides in leasing, asset sales, and reducing leverage, which, in turn, has substantially mitigated the company’s risk profile and execution risk associated with the new plan. However, InvestingPro data reveals that short-term obligations still exceed liquid assets, with a current ratio of 0.44, suggesting continued attention to balance sheet management is needed. Discover more insights with InvestingPro’s comprehensive research report, available along with 5 additional ProTips for MAC.
The Macerich Company, which specializes in owning and operating a portfolio of high-productivity malls, is now trading at what Mizuho considers to be a considerable and clear discount when compared to its historical valuation and that of its peers. This valuation gap is seen as an opportunity for investors seeking long-term earnings growth.
In conclusion, Mizuho’s revised stance on Macerich reflects a belief in the company’s ability to navigate its strategic plan effectively, with the potential for significant earnings upside in the long term. Despite the lower price target, the upgrade to Outperform suggests confidence in the company’s trajectory and its appeal to investors who are prepared for market fluctuations.
In other recent news, The Macerich Company reported its first quarter 2025 earnings, revealing a larger-than-expected loss with an EPS of -$0.20, missing the forecasted -$0.0747. Despite this, the company’s revenue of $249.22 million exceeded expectations of $206.71 million. Funds from operations (FFO) per share met the optimistic expectations set by Truist Securities, coming in at $0.33 per share. Truist Securities maintained a Buy rating for Macerich, with a $19.00 price target, following a report highlighting the company’s strong performance in leasing activity. The company signed 2.6 million square feet of leases in Q1 2025, marking a 156% increase compared to the same period last year. Additionally, Macerich’s Signed Not Yet Open (SNO) pipeline increased to $80 million, up from $66 million in the previous quarter. Shareholders at the annual meeting elected eight directors and approved the compensation package for the company’s executive officers. Furthermore, KPMG LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
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