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Realty Income Corp - Stock Quote O

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Morningstar's Realty Income Corp Stock Analysis

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Realty Income's Portfolio Fundamentals at or Near Historic Highs in 1Q

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

Realty Income's first-quarter earnings were slightly ahead of our expectations, though we don't see anything from the quarter that would materially change our $76 fair value estimate for the no-moat company. Economic occupancy rebounded 30 basis points to 99.2%, matching the company's historic record, which it last hit in the third quarter of 2021. Re-leasing spreads were also strong at 6.2% in the first quarter, one of the best results for a quarter over the past decade. Same-store net operating income grew 4.1%, which is also one of the highest levels in the company's history. As a result, Realty Income reported adjusted funds from operations of $0.98 per share in the first quarter, a 14.0% increase over the first quarter of 2021 and 4 cents ahead of our $0.94 estimate. Despite the better-than-anticipated first-quarter results, management did not raise 2022, and since our AFFO estimate of $3.90 is at the midpoint of management's guidance range of $3.84 to $3.97 for the year, we don't anticipate making any material changes to our forward estimates.

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Realty Income Corp's Company Profile

Business Description

Realty Income owns roughly 11,100 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.

11995 El Camino Real
San Diego, CA, 92130
T +1 858 284-5000
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Hard Assets
Employees 371

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