Macerich (MAC), a U.S. retail-focused REIT, has drawn renewed attention after recent trading showed solid short term and past 3 months gains, prompting investors to reassess the stock’s valuation and income profile.

Beyond the latest move, Macerich’s share price return has been strong over multiple timeframes. Over 30 days the share price return is 8.3%, over 90 days it is 18.4% and the year to date share price return is 38.2%. Long term investors have seen a 1 year total shareholder return of 57.1% and a 3 year total shareholder return of more than double their initial investment. This points to building momentum as the stock’s risk and income profile are reassessed around the current US$25.59 share price.

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After Macerich’s sharp share price run and a market price of about US$25.59 that now sits close to analyst targets yet at a large modelled intrinsic discount, a key question is where a reasonable view of fair value actually lands next.

Most Popular Narrative: 28.9% Overvalued

Compared with Macerich’s last close of $25.59, the most widely followed narrative points to a fair value of $19.85 using an 8.32% discount rate, which frames today’s price as materially above that narrative’s estimated value.

The persistent, long-term shift toward e-commerce and digital retail threatens to undermine Macerich's efforts to maintain or grow leasing revenue, as even with strong recent leasing activity, the secular decline in physical mall foot traffic will put sustained pressure on rent growth and overall net operating income over the next decade. This is expected to negatively impact both revenue and profit margins as traditional mall tenants continue to lose market share.

Want to see what sits behind that cautious fair value for Macerich? The narrative leans heavily on specific revenue trends, margin rebuild assumptions, and a future earnings multiple that looks unusually demanding for a retail REIT. The exact mix of earnings recovery, share count changes, and discounting might surprise you. The full breakdown shows how those moving parts combine into that $19.85 figure.

Result: Fair Value of $19.85 (OVERVALUED)

However, there are also clear risks to this cautious Macerich narrative, including the possibility of sustained leasing strength and successful execution of the Path Forward plan, which could support higher earnings.

Another View: What Multiples Say About Macerich

While the most popular Macerich narrative points to a fair value of $19.85 and labels the stock as overvalued at $25.59, the pricing based on sales tells a different story. Macerich trades on a P/S ratio of 7.4x, slightly below the US Retail REITs industry average of 7.5x and meaningfully below a 9.4x peer average. However, it sits well above a fair ratio estimate of 4.4x that the market could move toward. That mix of “cheap versus peers” but “expensive versus fair ratio” raises a simple question for you: is the risk that expectations reset down toward the fair ratio, or that peers re-rate closer to Macerich?

Next Steps

Sentiment on Macerich is clearly divided, so if you want a sharper view of the trade off between its challenges and potential, it makes sense to look through both sides of the story in detail by reviewing the 2 key rewards and 3 important warning signs

Looking for more ideas beyond Macerich?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.