MAC - Macerich: Increased Headwinds And Higher Valuation Reduce Investment Appeal (Rating Downgrade)

2024-05-01 02:02:07 ET

Summary

• Macerich's Q1 2024 results were below expectations, with a big miss on funds from operations (FFO) and a slight decrease in same center net operating income (NOI).
• The company faces persistent challenges including high interest rates, a weakened consumer, and increased competition from online retailers and overseas markets, all of which are pressuring traditional mall revenues.
• Refinancing debt at higher interest rates and pressures on consumer spending further contribute to the company's challenges.

The last time we covered Macerich ( MAC ) was about nine months ago, and at the time we were very optimistic given the low valuation and signs of receding headwinds. Since then, shares have outperformed even the mighty S&P 500 index ( SPY ) on a total return basis, by a wide margin....

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