Overview
Citi moved Macerich Company (NYSE: MAC) to a Buy rating from Neutral and increased its price target to $28 from $24, pointing to execution on the mall REIT's turnaround plan and improved capital flexibility as the main drivers behind the upgrade. The new target represents roughly 15% upside from current levels, and Citi says total return potential rises to about 18% when dividends are included.
Turnaround traction and leasing progress
The brokerage emphasized the company’s progress on its "Path Forward" strategy, noting that Macerich has achieved approximately 83% of its leasing target. Citi also highlighted that management has completed all 30 planned anchor tenant replacements. These operational milestones are presented as evidence that the company’s repositioning efforts are advancing and that earlier concerns about the long-term growth outlook have diminished, according to Citi.
Capital and acquisition capacity
Earlier this month Macerich completed a 14 million-share forward equity offering priced at $23.90 per share, which is expected to produce about $324 million in proceeds. When combined with roughly $120 million in existing cash, Citi estimates the REIT could deploy between $800 million and $900 million into acquisitions that the brokerage deems to be accretive at attractive yields. Citi flagged this growing acquisition pipeline and the fresh capital from the equity raise as catalysts for future earnings growth.
Financial outlook and FFO revisions
Reflecting anticipated acquisition activity and the company's balance sheet improvement, Citi increased its funds-from-operations (FFO) projections to $1.55 per share for 2026 and $1.73 for 2027. The brokerage also now forecasts 2028 FFO of $1.98 per share, which it notes is above management’s midpoint target of $1.90 and ahead of broader market expectations.
Market context
The upgrade comes after Macerich already emerged as one of the stronger-performing retail REITs this year, having outpaced both retail REIT peers and the broader REIT sector. Citi acknowledged that the recent rally has tightened the valuation runway, but argued that continued execution of the company’s turnaround reduces long-term growth concerns and supports additional upside.
Implications for investors
For investors, Citi’s actions signal increased confidence in Macerich’s ability to convert leasing progress and new capital into accretive acquisitions and higher FFO. The bank’s updated numbers and the upgraded rating provide a clearer set of expectations for potential returns, including dividend income.