Macerich (MAC) to Report Q2 Earnings: What's in the Cards?

Retail real estate investment trust (“REIT”) The Macerich Company MAC is expected to report second-quarter 2016 results on Aug 1, 2016, before the market opens. Last quarter, the company had delivered a 3.49% positive surprise.

For the trailing four quarters, Macerich posted an average positive surprise of 3.68%, beating estimates on all occasions. The Zacks Consensus Estimate for the second quarter funds from operations (“FFO”) is currently pegged at 97 cents.

Let’s see how things have shaped up for this announcement.

Factors to Consider

Macerich’s portfolio of premium malls in the vibrant U.S. markets and the presence of well-capitalized retailers in its roaster enabled the company to maintain a stable source of rent over the past quarters.

Moreover, amid a low supply of new properties, a steadily rising demand is emerging as the sector’s primary growth driver. Macerich with its high-quality portfolio is well-positioned to take advantage of these market dynamics. All these are expected to be reflected in the company’s second-quarter 2016 results.

However, apart from competing with other retail properties, Macerich faces competition from alternative retail channels such as catalogs and e-Commerce websites. Moreover, substantial assets concentration in California and Arizona and any rise in interest rate are concerns before Macerich.

Earnings Whispers

Our proven model does not conclusively show that Macerich will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate Estimate and the Zacks Consensus Estimate currently stand at 97 cents, which translate into an Earnings ESP of 0.00%.

Zacks Rank: Macerich’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings beat.

Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

MACERICH CO Price and EPS Surprise

MACERICH CO Price and EPS Surprise | MACERICH CO Quote

Stocks to Consider

Here are a few stocks in the real estate investment trust sector you may want to consider, as our model shows that they have the right combination of elements to post a positive surprise this quarter:

Sun Communities Inc. SUI has an Earnings ESP of +2.44% and a Zacks Rank #2. The company will report results on Aug 2.

Regency Centers Corporation REG has an Earnings ESP of +1.25% and a Zacks Rank #3. The company will release results on Aug 2.

National Health Investors Inc. NHI has an Earnings ESP of +0.83% and a Zacks Rank #2. The company will report results on Aug 5.

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. All earnings per share numbers presented in this write up represent FFO per share.

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