Headquartered in San Diego, California, Realty Income Corporation (O) is an American real estate investment trust (REIT) specializing in acquiring and managing high-quality, single-tenant commercial properties. With a market cap of $52.63 billion, Realty Income is known for its diverse portfolio and reliable monthly dividend payments. Through its extensive property holdings, it serves a wide range of tenants across various industries.
Realty Income has underperformed the broader market considerably over the past year. The REIT has gained marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. In 2024, the REIT has gained 5.3%, compared to SPX's 9.9% gains on a YTD basis.
Narrowing the focus, O has marginally outperformed the iShares Cohen & Steers REIT ETF’s (ICF) 4.8% returns on a YTD basis.
On Aug. 5, O reported its Q2 results. The stock declined marginally on the day it released earnings. The company posted funds from operations (FFO) of $1.06 per share, surpassing Wall Street expectations of $1.05 per share. The company reported revenue of $1.34 billion, exceeding the forecasted $1.31 billion. For the full year, O projects FFO between $4.15 to $4.21 per share.
For the current fiscal year, ending in December, analysts expect O to report FFO growth of 5% year over year to $4.20 on a diluted basis. The company's earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 19 analysts covering O, the consensus rating is “Moderate Buy.” That’s based on seven “Strong Buys” ratings, one “Moderate Buy,” and eleven “Holds.”
On Aug. 6, Scotiabank analyst Greg McGinniss maintained a “Hold” rating on Realty Income with a price target of $56, which indicates that the stock trades at a premium.
The mean price target of $61.23 represents a 1.3% premium to Realty Income’s current price levels. The Street-high price target of $69 suggests an upside potential of 14.2%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
