Real estate investment trust Realty Income (O) reported its Q1 2025 results on Monday, with earnings of $0.28 missing estimates of $0.36 per share. In addition, Realty Income reported an adjusted FFO per share of $1.06, slightly exceeding analysts’ estimate of $1.05. Revenue for the quarter came in at $1.38 billion, beating the $1.30 billion consensus, and was up from $1.34 billion in the previous quarter and $1.26 billion a year ago. President and CEO Sumit Roy pointed to the company’s strong portfolio performance, especially in Europe.
In addition, same-store rental revenue grew 1.3% year-over-year in Q1, which was an improvement compared to the 0.8% growth in Q4 2024. As of March 31, 2025, the portfolio’s occupancy rate stood at 98.5%, slightly down from 98.7% at the end of 2024 and 98.6% a year earlier.
Total expenses for the quarter were $1.14 billion, down from $1.34 billion in Q4 2024, and remained nearly flat year-over-year. The company also reported a rent recapture rate of 103.9% on units that were re-leased in Q1, with new annualized contractual rent of $46.22 million compared to the previous annual rent of $44.48 million.
Realty Income’s 2025 Outlook
Looking forward, management now expects the following for FY 2025:
- Normalized AFFO per share between $4.22 and $4.28 versus analysts’ estimates of $4.24 per share
- Same-store rent growth of approximately 1%
- Occupancy rate of over 98%
As you can see, guidance for FFO per share was essentially in line with expectations, which, along with its earnings results, is what likely led to the stock’s slight dip in after-hours trading.
Is O Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on O stock based on two Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Realty Income price target of $60.63 per share implies 6.5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
