Realty Income (NYSE:O) Shares Down 1.7% Following Analyst Downgrade

Key Points

• Realty Income shares fell 1.7% after Scotiabank downgraded the stock from “sector outperform” to “sector perform” and set a $59 price target. Trading volume was roughly 119% above average, while the shares remained below their 50-day and 200-day moving averages.
• Analysts maintain a broadly neutral view, with a consensus “Hold” rating and an average price target of $66.23. Recent targets range from $59 to $69, and the stock has declined 9.7% over the past month.
• The REIT continues to appeal to income-focused investors, having increased its monthly dividend to $0.2715, representing an annualized yield of about 5.9%. Its latest quarter met EPS expectations, exceeded revenue estimates, and delivered 9.7% year-over-year revenue growth.

Realty Income Corporation (NYSE:O - Get Free Report)'s share price dropped 1.7% on Wednesday after Scotiabank downgraded the stock from a sector outperform rating to a sector perform rating. Scotiabank now has a $59.00 price target on the stock. Realty Income traded as low as $55.28 and last traded at $55.5530. Approximately 13,478,817 shares were traded during mid-day trading, an increase of 119% from the average daily volume of 6,167,007 shares. The stock had previously closed at $56.53.

Other equities research analysts have also recently issued reports about the company. Evercore set a $65.00 price target on Realty Income in a research note on Monday. Wells Fargo & Company dropped their price target on Realty Income from $65.00 to $64.00 and set an "equal weight" rating on the stock in a research note on Tuesday, September 1st. Robert W. Baird upped their price objective on shares of Realty Income from $64.00 to $65.00 and gave the company a "neutral" rating in a report on Monday, July 6th. Mizuho decreased their price objective on shares of Realty Income from $66.00 to $61.00 and set a "neutral" rating for the company in a research report on Thursday, September 17th. Finally, Jefferies Financial Group started coverage on shares of Realty Income in a research note on Monday, June 1st. They issued a "buy" rating and a $69.00 target price for the company. One research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $66.23.

Realty Income News Summary

Here are the key news stories impacting Realty Income this week:

• Positive Sentiment: Realty Income remains appealing to income investors after its recent slide, with the company having raised its dividend for 136 consecutive months. The next monthly dividend is scheduled for Oct. 15 for shareholders of record on Sept. 30. 5 Safe Monthly Pay Dividend Stocks Boomers Love in September
• Positive Sentiment: The company’s new euro-denominated joint venture with KKR, backed by 54 European net-lease properties, expands Realty Income’s international platform and could support future growth. Recent weakness has also made the valuation and dividend yield more attractive to some investors. Is Realty Income Cheap After Its New Europe Venture and Recent Slide?
• Neutral Sentiment: Several commentaries argue that Realty Income has historically been resilient during market corrections and that Wall Street’s longer-term targets imply meaningful upside after three months of selling. These views may provide support, but they are analyst opinions rather than new operating results. Realty Income Falls for Three Months
• Negative Sentiment: Scotiabank downgraded Realty Income from “sector outperform” to “sector perform,” although it set a $59 price target, above the current trading level. The downgrade adds near-term pressure to a stock already trading well below its 50-day and 200-day moving averages and near its 12-month low. Tickerreport.com Realty Income Downgrade
• Negative Sentiment: Recent performance has been weak, with the stock down 9.7% over one month and 3.7% over seven days. Investors appear to be weighing that momentum against the company’s dependable dividend and longer-term total returns.

Hedge Funds Weigh In On Realty Income

A number of institutional investors have recently modified their holdings of O. Nomura Asset Management Co. Ltd. grew its holdings in shares of Realty Income by 0.7% in the fourth quarter. Nomura Asset Management Co. Ltd. now owns 2,323,920 shares of the real estate investment trust's stock valued at $130,999,000 after purchasing an additional 16,546 shares during the period. Meiji Yasuda Asset Management Co Ltd. purchased a new position in Realty Income during the second quarter worth about $17,203,000. Renaissance Technologies LLC acquired a new position in Realty Income in the 1st quarter valued at about $3,147,000. M3 Wealth Management LLC purchased a new stake in shares of Realty Income in the 2nd quarter valued at approximately $2,665,000. Finally, Geode Capital Management LLC grew its stake in shares of Realty Income by 2.8% in the 4th quarter. Geode Capital Management LLC now owns 29,206,196 shares of the real estate investment trust's stock valued at $1,655,991,000 after buying an additional 793,100 shares during the period. Hedge funds and other institutional investors own 70.81% of the company's stock.

Realty Income Price Performance

The stock's fifty day moving average price is $62.16 and its 200-day moving average price is $62.39. The firm has a market cap of $52.57 billion, a price-to-earnings ratio of 40.55, a P/E/G ratio of 4.03 and a beta of 0.71. The company has a current ratio of 5.88, a quick ratio of 5.88 and a debt-to-equity ratio of 0.73.

Realty Income (NYSE:O - Get Free Report) last released its quarterly earnings data on Wednesday, August 5th. The real estate investment trust reported $1.09 EPS for the quarter, meeting analysts' consensus estimates of $1.09. The firm had revenue of $1.55 billion for the quarter, compared to analysts' expectations of $1.40 billion. Realty Income had a return on equity of 3.12% and a net margin of 20.93%.The firm's quarterly revenue was up 9.7% on a year-over-year basis. During the same period in the prior year, the firm posted $1.05 earnings per share. Realty Income has set its FY 2026 guidance at 4.440-4.450 EPS. As a group, equities research analysts forecast that Realty Income Corporation will post 4.42 earnings per share for the current fiscal year.

Realty Income Increases Dividend

The firm also recently declared a monthly dividend, which will be paid on Thursday, October 15th. Stockholders of record on Wednesday, September 30th will be paid a $0.2715 dividend. This is a boost from Realty Income's previous monthly dividend of $0.27. The ex-dividend date of this dividend is Wednesday, September 30th. This represents a c) annualized dividend and a dividend yield of 5.9%. Realty Income's dividend payout ratio is currently 237.23%.

Realty Income Company Profile

Realty Income Corporation is a real estate investment trust (REIT) that owns and manages a diversified portfolio of commercial properties. The company primarily uses long-term, single-tenant, net lease agreements, under which tenants generally assume responsibility for property-level expenses such as maintenance, insurance and taxes.

Its portfolio includes retail, industrial, distribution, office, gaming and other commercial properties. Realty Income serves a broad range of tenants, including convenience stores, grocery stores, pharmacies, home improvement retailers, restaurants, logistics operators and other established businesses.

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