Valued at a market cap of $47.8 billion, Realty Income Corporation (O) is engaged in the acquisition and management of freestanding commercial properties that reap rental revenue under long-term net lease agreements. The San Diego, California-based company is expected to announce its fiscal Q4 earnings results on Tuesday, Feb. 18.
Prior to this event, analysts expect the REIT to report an FFO of $1.06 per share, up almost 5% from $1.01 per share in the year-ago quarter. The company has met or surpassed Wall Street's FFO estimates in three of the last four quarters while missing on another occasion. In Q3, O’s FFO of $1.05 per share came in line with the Wall Street estimates.
For fiscal 2024, analysts expect O to report an FFO of $4.19 per share, up nearly 4.8% from $4 per share in fiscal 2023.
Shares of Realty Income have declined 4.5% over the past 52 weeks, significantly falling behind both the S&P 500 Index's ($SPX) 26.5% rise and the Real Estate Select Sector SPDR Fund’s (XLRE) 6.5% return over the same time frame.
Realty Income released its Q3 earnings results on Nov. 4, and shares of O marginally fell on the subsequent day as the company’s revenue of $1.3 billion slightly missed the consensus estimates. However, the top line grew 28.1% from the year-ago quarter. A marginal year-over-year decrease in portfolio occupancy and a $63 million non-cash charge related to a convenience store client affected the results to some extent. The company’s AFFO of $1.05 per share improved by 2.9% annually and came in line with the Street’s forecast.
Wall Street analysts are moderately optimistic about Realty Income’s stock, with a "Moderate Buy" rating overall. Among 23 analysts covering the stock, six recommend "Strong Buy," one suggest “Moderate Buy,” and 16 indicate “Hold.” This configuration is slightly less bullish than three months ago, with seven analysts suggesting a “Strong Buy.”
The average price target for O is $61.37, which indicates a modest 12.3% potential upside from the current levels.
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