Retail real estate investment trust (REIT) The Macerich Company MAC is expected to report first-quarter 2017 results on Apr 27 after market close. Last quarter, the company delivered a positive earnings surprise of 0.86%.

For the trailing four quarters, Macerich posted an average positive earnings surprise of 2.38%, beating estimates on three occasions. The graph below depicts this surprise history.

Macerich Company (The) Price and EPS Surprise

Macerich Company (The) Price and EPS Surprise | Macerich Company (The) Quote

Shares of the company lost 7.1% in the last three months. The Zacks Consensus Estimate for the first quarter funds from operations (FFO) is currently pegged at 84 cents.

Let’s see how things have shaped up for this announcement.

Factors to Consider

Apart from competing with other retail properties, Macerich faces competition from alternative retail channels such as catalogs and e-Commerce websites. In fact, the dwindling mall traffic and store closures amid aggressive growth in online sales kept retail REITs on tenterhooks. While the company is striving hard to counter such pressure through various moves, it still poses a huge challenge for the company.

However, the Santa Monica, CA-based company enjoys a portfolio of premium malls in the vibrant U.S. markets. Further, the presence of well-capitalized retailers in its roaster enabled the company to maintain a stable source of rent in the past quarters.

In the last 30 days, Macerich’s first-quarter estimates declined 1.2% to 84 cents.

Earnings Whispers

Our proven model does not conclusively show that Macerich will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at 84 cents, which translates into an Earnings ESP of 0.00%.

Zacks Rank: Macerich currently carries a Zacks Rank #3. Though this increases the predictive power of ESP, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks That Warrant a Look

Here are a few stocks in the REIT sector that you may want to consider, as our model shows that they have the right combination of elements to report a positive surprise this quarter.

EPR Properties EPR, expected to release earnings on May 2, has an Earnings ESP of +0.84% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Physicians Realty Trust DOC, expected to release earnings on May 3, has an Earnings ESP of +3.33% and a Zacks Rank #3.

STORE CAPITAL CORPSTORE CAPITAL CORP STOR, expected to release first-quarter results on May 4, has an Earnings ESP of +2.44% and a Zacks Rank #3.

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

More Stock News: This Is Bigger than the iPhone!  
 
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Macerich Company (The) (MAC): Free Stock Analysis Report
 
EPR Properties (EPR): Free Stock Analysis Report
 
STORE Capital Corporation (STOR): Free Stock Analysis Report
 
Physicians Realty Trust (DOC): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research