MAC
The Macerich Company
$22.17
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Strong
·
Conviction
Overvalued
Trading 58.6% above fair value
You pay
$22.17
Bear
$11.43
Fair
$13.98
Bull
$16.52
Bear
$11.43
-48.4%
$0.64 FFO × 12x
Fair
$13.98
-37.0%
$0.64 FFO × 15x
Bull
$16.52
-25.5%
$0.64 FFO × 18x
Key Value Driver
FFO/share ($0.64) × retail P/FFO multiple
Implied Market Multiple
34.4x
Summary
Our base-case estimate uses P/FFO × Retail REIT Multiple. We then blend that result with the average analyst price target of $21.88 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $13.98 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Wall Street's average price target is $21.88 (from 34 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify