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Macerich Q3 Earnings: Can NYSE:MAC Hit Its -$0.18 EPS Target?

in EARNINGS/INVESTING IDEAS by

The Macerich Company (NYSE:MAC) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of -$0.18/share on revenue of $194.6 million. The consensus earnings per share (EPS) of -$0.18/share is based on a poll of 5 analysts and represents a decline in eps of −158.1% over the same quarter last year, when the company reported earnings of $0.31/share.

The revenue forecast of $194.6 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −9.2%. Last year the company reported $214.3 million in revenue for the quarter.

Expected to report EPS of -$0.18/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $194.58 $214.26 −9.2%
EPS -$0.18 $0.31 −158.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarter, and met expectations 1 quarter.

What are your expectations from The Macerich Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.32 -$0.18 43.6% Beat
Q1, 2020 $0.04 $0.05 36.4% Beat
Q4, 2019 $0.19 $0.15 −17.5% Missed
Q3, 2019 $0.10 $0.31 216.9% Beat
Q2, 2019 $0.09 $0.17 94.6% Beat
Q1, 2019 $0.08 $0.10 13.9% Beat
Q4, 2018 $0.28 $0.28 0% Met
Q3, 2018 $0.20 $0.18 −10.4% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 4.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 10, 2020 $7.85 $8.18 4.2% Increase
May 11, 2020 $6.84 $6.41 −6.3% Decline
February 6, 2020 $23.90 $23.36 −2.3% Decline
October 31, 2019 $27.36 $28.19 3.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.64, the model suggests that the company is likely an earnings manipulator. A value of −1.64 implies a 5.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

The Macerich Company is currently trading at $6.96/share, up 2.1% for the day. The company is trading at approximately 23.4% of its 52-week high of $29.74/share. The company’s stock price is down −14.9% since the last earnings report and down −7.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 43.93 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MAC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 19.11 and a forward P/E multiple of −18.24.

The Macerich Company’s current share price also implies a price-to-book (P/B) multiple of 0.42. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $6.96
P/E Ratio 19.1x
P/E Ratio (Fwd) −18.2x
PEG Ratio −0.4
Total Debt / Total Capital 83.7%
Levered Free Cash Flow $174.7 million
EV / EBITDA 10.0x

Finbox

The Macerich Company is a small-cap stock with a market capitalization of $1.04 billion and a total enterprise value of $6.902 billion. The company operates in the Real Estate sector and the Equity Real Estate Investment Trusts (REITs) industry.

Macerich is a fully integrated, self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Macerich currently owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers. Macerich specializes in successful retail properties in many of the country’s most attractive, densely populated markets with significant presence in the West Coast, Arizona, Chicago and the Metro New York to Washington, DC corridor. A recognized leader in sustainability, Macerich has achieved the #1 GRESB ranking in the North American Retail Sector for five straight years (2015 – 2019).

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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