Tuesday, Mizuho reiterated its underperform rating on shares of The Macerich Company (NYSE: NYSE:MAC) with a consistent price target of $14.00. The firm's stance follows Macerich's recent presentation providing additional details on its strategy to reduce debt to approximately 6 to 6.5 times debt/EBITDA and to achieve $1.80 of funds from operations (FFO) per share by 2028, as initially discussed during the company's first-quarter 2024 earnings call.
The firm's analysis comes after a discussion with Macerich's management, leading to adjusted expectations for 2024-2025. The revised estimates take into account a higher volume of asset sales and equity issuance than was previously anticipated. Despite acknowledging the company's transparent communication and support for its long-term objectives, Mizuho expresses concern over the high level of execution risk associated with the plan.
Mizuho's assessment suggests that Macerich's earnings may face more immediate downward pressure, which challenges the perception of the stock's value. The firm highlights that the stock is trading at approximately 9 times its estimated 2025 FFO compared to 8.6 times its estimated 2024 FFO.
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