Macerich Company Stock Downgraded (MAC)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Macerich Company (NYSE: MAC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and disappointing return on equity.

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Highlights from the ratings report include:
  • MAC's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 16.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for MACERICH CO is currently lower than what is desirable, coming in at 28.43%. Regardless of MAC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MAC's net profit margin of 48.06% significantly outperformed against the industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has decreased by 16.8% when compared to the same quarter one year ago, dropping from $174.25 million to $144.98 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, MACERICH CO underperformed against that of the industry average and is significantly less than that of the S&P 500.

The Macerich Company is an independent real estate investment trust. The firm invests in the real estate markets of the United States. Macerich has a market cap of $7.96 billion and is part of the financial sector and real estate industry. Shares are down 2.4% year to date as of the close of trading on Thursday.

You can view the full Macerich Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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