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Realty Income (O)
NYSE:O

Realty Income (O) AI Stock Analysis

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O

Realty Income

(NYSE:O)

Rating:79Outperform
Price Target:
$65.00
▲(12.69%Upside)
Realty Income's strong financial performance and positive earnings call sentiment are key strengths, supported by strategic corporate events. The high P/E ratio and technical indicators suggest caution, but the attractive dividend yield and robust cash flow management provide balance, resulting in a solid overall score.
Positive Factors
Dividend
The company's monthly dividend was raised by 3.4% year-over-year.
Valuation
The company believes their platform of $80bn of EV with ~16k properties and over 500 employees in 8 countries is undervalued in the public market.
Negative Factors
Diversification
Tenant concentrations are increasing, with Realty Income deriving more than a quarter of its rents from C-stores, grocers, and dollar stores, raising concerns about diversification.
Earnings Growth
Realty Income's initial FY25 AFFO/sh guidance implies just 1.4% growth, falling short of consensus and peers' growth profiles.

Realty Income (O) vs. SPDR S&P 500 ETF (SPY)

Realty Income Business Overview & Revenue Model

Company DescriptionRealty Income Corporation, often known as 'The Monthly Dividend Company,' is a real estate investment trust (REIT) that focuses on generating consistent monthly income for its investors. The company primarily invests in free-standing, single-tenant commercial properties across various sectors, including retail, industrial, and office spaces. With a diversified portfolio, Realty Income aims to provide shareholders with a stable and growing dividend yield.
How the Company Makes MoneyRealty Income makes money by acquiring and managing a large portfolio of commercial properties under long-term, net lease agreements. These leases require the tenant to cover most of the property expenses, including maintenance, insurance, and taxes, allowing Realty Income to generate predictable and stable rental income. The company's revenue model is heavily reliant on its ability to maintain high occupancy rates and strategically acquire properties with creditworthy tenants. Additionally, Realty Income's financial performance is supported by its investment-grade credit rating, which helps in securing favorable financing terms. The company also benefits from its diversified tenant base, which reduces dependency on any single industry or tenant, thereby enhancing its ability to generate consistent cash flow.

Realty Income Key Performance Indicators (KPIs)

Any
Any
Rental Revenue Breakdown
Rental Revenue Breakdown
Analyzes revenue streams from various property types, providing insight into income stability and growth opportunities in different market segments.
Chart InsightsRealty Income's rental revenue is experiencing robust growth, particularly in the Retail and Industrial segments, reflecting strategic investments and high occupancy rates. The absence of Office and Agriculture revenues since 2021 indicates a strategic shift away from these sectors. The recent earnings call highlights strong AFFO growth and a solid financial position, despite slight occupancy declines and cautious US investment activity. The company's focus on European investments and successful fundraising efforts positions it well to navigate market uncertainties and capitalize on emerging opportunities.
Data provided by:Main Street Data

Realty Income Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 2.27%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong operational performance with continued AFFO growth, high investment yields, and successful financial management. However, challenges such as a slight decline in occupancy and cautious US investment activity temper the positive outlook.
Q1-2025 Updates
Positive Updates
Strong AFFO Growth
AFFO per share increased by 2.9% year-over-year to $1.06, maintaining a positive growth trend over nearly 30 years.
High Investment Activity
The company invested $1.4 billion with a 7.5% weighted average initial cash yield, with 65% of the investment in Europe.
Robust Portfolio Performance
The portfolio achieved 98.5% occupancy, slightly above the historical median, and a rent recapture rate of 103.9%.
Dividend and Return
A 6% dividend yield combined with AFFO growth resulted in a total operational return of 8.9% for the quarter.
Successful Fundraising and Credit Facility Expansion
Closed a $600 million bond offering and expanded the credit facility to $5.38 billion, demonstrating strong financial backing.
Negative Updates
Slight Decline in Occupancy
Occupancy decreased by 20 basis points from the previous quarter due to strategic asset sales and portfolio optimization.
US Investment Challenges
Some US investment opportunities were forgone due to insufficient initial spread and risk concerns.
Zips Rent Adjustment
Although no assets were rejected, there was a 5.7% decrease in rent from renegotiations with Zips, adjusted to 94.3% of prior ABR.
Company Guidance
During the Realty Income First Quarter 2025 Earnings Conference Call, the company provided guidance for the year. They reported first-quarter AFFO per share at $1.06, reflecting a year-over-year growth of 2.9%, and maintained their full-year 2025 AFFO per share outlook at $4.22 to $4.28. The company also anticipates a total investment of approximately $4 billion throughout the year. Additionally, Realty Income achieved a total operational return of 8.9% for the quarter, driven by a 6% dividend yield. They ended the quarter with a portfolio occupancy of 98.5%, and their rent recapture rate was 103.9%. Importantly, the company has factored in a potential 75 basis points of rent loss for the year due to properties acquired through prior M&A transactions. Despite market uncertainties, the company remains confident in navigating challenges and capitalizing on opportunities, supported by a well-capitalized balance sheet and a diversified portfolio.

Realty Income Financial Statement Overview

Summary
Realty Income demonstrates strong financial health with significant revenue growth, high profitability, and robust cash flow management. The company's stable balance sheet with moderate leverage supports its financial stability.
Income Statement
85
Very Positive
Realty Income shows strong financial performance with robust growth in total revenue, which increased from $3.34 billion in 2022 to $5.39 billion in TTM. The company maintains a high gross profit margin of approximately 92.7% and a solid EBIT margin of 44.4% in TTM. Net profit margin improved to 18.1%, indicating healthy profitability. The revenue growth rate from 2024 to TTM is 2.28%, suggesting steady expansion.
Balance Sheet
78
Positive
The company exhibits a stable balance sheet with a moderate debt-to-equity ratio of 0.71, reflecting manageable leverage levels. Realty Income's equity ratio stands at 55.9%, indicating a strong equity base relative to its assets. Return on equity improved to 2.51% in TTM, signaling effective use of shareholder funds despite being on the lower side.
Cash Flow
82
Very Positive
Realty Income demonstrates robust cash flow management with operating cash flow of $3.58 billion in TTM, consistently covering its free cash flow needs. The free cash flow to net income ratio is favorable, highlighting efficient cash generation relative to profits. The company maintains a strong operating cash flow to net income ratio, indicating effective cash conversion from operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.39B5.27B4.08B3.34B2.08B1.65B
Gross Profit5.00B4.89B3.76B1.45B1.95B1.55B
EBITDA4.29B4.33B3.60B2.93B1.85B1.55B
Net Income978.30M860.77M872.31M869.41M359.46M395.49M
Balance Sheet
Total Assets69.76B68.84B57.78B49.67B43.14B20.74B
Cash, Cash Equivalents and Short-Term Investments319.01M444.96M232.92M171.10M258.58M824.48M
Total Debt27.54B26.76B21.99B19.49B15.44B8.82B
Total Liabilities30.52B29.78B24.67B20.83B18.01B9.72B
Stockholders Equity39.03B38.84B32.94B28.71B25.05B10.99B
Cash Flow
Free Cash Flow3.58B3.57B2.96B2.56B1.30B1.11B
Operating Cash Flow3.58B3.57B2.96B2.56B1.32B1.12B
Investing Cash Flow-4.27B-3.34B-9.35B-8.39B-6.44B-2.03B
Financing Cash Flow336.37M-21.16M6.44B5.74B4.58B1.69B

Realty Income Technical Analysis

Technical Analysis Sentiment
Positive
Last Price57.68
Price Trends
50DMA
56.35
Positive
100DMA
55.81
Positive
200DMA
55.67
Positive
Market Momentum
MACD
0.40
Negative
RSI
58.01
Neutral
STOCH
62.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For O, the sentiment is Positive. The current price of 57.68 is above the 20-day moving average (MA) of 57.15, above the 50-day MA of 56.35, and above the 200-day MA of 55.67, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 58.01 is Neutral, neither overbought nor oversold. The STOCH value of 62.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for O.

Realty Income Risk Analysis

Realty Income disclosed 34 risk factors in its most recent earnings report. Realty Income reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Realty Income Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
KIKIM
79
Outperform
$14.63B28.275.19%4.63%12.55%45.10%
OO
79
Outperform
$52.09B52.342.50%5.60%22.56%2.59%
REREG
76
Outperform
$12.93B33.395.83%3.98%7.39%3.41%
NNNNN
76
Outperform
$8.18B20.249.35%5.33%5.40%-1.33%
FRFRT
73
Outperform
$8.32B27.519.85%4.59%6.07%24.23%
SPSPG
73
Outperform
$62.88B24.9173.22%5.04%4.25%-14.90%
65
Neutral
£989.01M11.77-0.08%5.05%10.32%31.28%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
O
Realty Income
57.68
7.38
14.67%
KIM
Kimco Realty
21.62
3.19
17.31%
NNN
National Retail Properties
43.51
3.32
8.26%
REG
Regency Centers
70.79
11.34
19.07%
SPG
Simon Property
166.74
26.95
19.28%
FRT
Federal Realty
95.80
-0.61
-0.63%

Realty Income Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Realty Income Updates Term Loan Agreements
Neutral
Jun 23, 2025

On June 23, 2025, Realty Income Corporation announced amendments to its existing term loan agreements with Wells Fargo and Toronto Dominion, aligning them with its recently updated credit agreement. These amendments involve a $300 million term loan due in 2025 and a $500 million term loan due in 2027, as well as multi-currency loans allowing up to $1.5 billion in borrowings, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (O) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Realty Income stock, see the O Stock Forecast page.

Private Placements and Financing
Realty Income Closes €1.3 Billion Notes Offering
Positive
Jun 20, 2025

On June 20, 2025, Realty Income Corporation successfully closed its offering of €650 million in 3.375% Notes due 2031 and another €650 million in 3.875% Notes due 2035. This financial maneuver, facilitated by major financial institutions, is expected to bolster the company’s capital structure and enhance its market positioning.

The most recent analyst rating on (O) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Realty Income stock, see the O Stock Forecast page.

Private Placements and Financing
Realty Income Announces €1.3 Billion Notes Offering
Neutral
Jun 12, 2025

On June 11, 2025, Realty Income Corporation announced a purchase agreement to issue and sell €650 million of 3.375% Notes due 2031 and €650 million of 3.875% Notes due 2035 to a group of underwriters. The offering is expected to close on June 20, 2025, subject to customary conditions, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (O) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Realty Income stock, see the O Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Realty Income Reports Strong Liquidity Position
Positive
Jun 11, 2025

On June 11, 2025, Realty Income Corporation provided updates on its capital raising and liquidity status, revealing a liquidity position of $4.6 billion as of June 6, 2025. This includes cash and cash equivalents, unsettled ATM forward equity, and availability under its credit facilities, indicating a strong financial position to support its operations and strategic initiatives.

The most recent analyst rating on (O) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Realty Income stock, see the O Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Realty Income Holds Annual Meeting, Elects Directors
Neutral
May 15, 2025

On May 13, 2025, Realty Income held its Annual Meeting where stockholders voted on several key proposals. All ten director nominees were elected to serve until the 2026 annual meeting, and KPMG LLP’s appointment as the independent registered public accounting firm for 2025 was ratified. Additionally, stockholders approved the compensation of the company’s named executive officers and an amendment to the Realty Income Corporation 2021 Incentive Award Plan.

The most recent analyst rating on (O) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Realty Income stock, see the O Stock Forecast page.

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Realty Income Expands Credit Facilities by $5.38 Billion
Positive
May 5, 2025

On May 5, 2025, Realty Income Corporation announced its financial results for the first quarter ending March 31, 2025. The company reported a net income of $249.8 million, or $0.28 per share, and an increase in Adjusted Funds from Operations (AFFO) per share by 2.9% to $1.06 compared to the same period in 2024. Realty Income invested $1.4 billion at a 7.5% yield and settled 11.2 million shares of forward sale agreements for $632 million. The company also issued $600 million in senior unsecured notes and expanded its credit facilities by $5.38 billion in April 2025. Realty Income’s portfolio remains robust with a 98.5% occupancy rate, and the company continues to benefit from its diversified and strategic investments, particularly in Europe.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 21, 2025