Here's Why it is Wise to Retain Macerich Stock in Your Portfolio Now

The Macerich Company MAC is well-poised to gain from its portfolio of premium shopping centers in vibrant markets.Its focus on omnichannel retailing and developing mixed-use assets is likely to support its long-term growth, along with balance sheet-strengthening moves. However, growing e-commerce adoption by consumers raises concerns for the company. Tenant bankruptcies and a substantially leveraged balance sheet remain a headwind.In March 2025, MAC announced that it has sealed a multi-year sponsorship and member engagement agreement with PenFed Credit Union, America’s second-largest federal credit union, for its Tysons Corner Center Plaza. This arrangement will aid in elevating the brand appeal and reach of the center’s experiential marketing programs and media network, attracting millions of shoppers and PenFed members annually.What’s Aiding MAC?Macerich has a high concentration of premium malls in vibrant U.S. markets. These properties are located in densely populated areas, where affluent consumers with significant disposable incomes live and play, offering the company solid scope to generate decent cash flows.Macerich has been making efforts to enhance its asset quality and customer relationships by increasing the adoption of the omnichannel model. This is likely to benefit the company. Further, the shift toward re-use and mixed-use properties through recapture and repositioning of anchor tenants remains a key emphasis, while bringing brands to new markets at its mall is likely to attract shoppers.Macerich has been focusing on an aggressive capital-recycling program. This involves the divestiture of non-core and slower-growth assets and the usage of the proceeds to increase its presence in core markets and invest in higher-growth properties through acquisitions, developments and redevelopment initiatives and lower its leverage.Apart from raising capital, strategic dispositions made over the years have helped reduce impending bankruptcy issues across the lower-quality disposed portfolio. For 2025, Macerich expects to incur approximately $250 to $300 million for development, redevelopment, expansion and renovations.What’s Hurting MAC?Given the conveniences of online shopping, growing e-commerce adoption may weigh on Macerich’s prospects. Online retailing is likely to remain a popular choice among customers, adversely impacting the market share for brick-and-mortar stores.Macerich’s performance in the upcoming quarters is expected to be negatively impacted by the bankruptcy of Express and others. In 2024, MAC witnessed 13 bankruptcy filings from its tenants, totaling $21.7 million of annual leasing revenues at the company’s share. We expect Macerich’s total revenues to decrease by 2.8% in 2025.Macerich has a substantially leveraged balance sheet. As of Dec. 31, 2024, its total pro-rata share of debt was approximately $6.65 billion and net debt to adjusted EBITDA was 7.99X.This leveraged balance sheet limits its strength to withstand any credit crisis and unexpected negative externalities in the future.Over the past three months, MAC shares have fallen 15.7%, underperforming the industry's 4.5% decline. Analysts seem bearish on this retail REIT, which carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has moved southward marginally to $1.50 over the past week.Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks from the retail REIT sector are Regency Centers REG and Tanger Inc. SKT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Regency Centers’ current-year FFO per share has been raised marginally upward over the past month to $4.54.The Zacks Consensus Estimate for Tanger Inc.’s current-year FFO per share has been revised marginally northward over the past month to $2.26.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Macerich Company (The) (MAC): Free Stock Analysis Report Regency Centers Corporation (REG): Free Stock Analysis Report Tanger Inc. (SKT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks