U.S. Markets closed

Realty Income Corp. (O) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Realty Income Corp. (O) closed at $68.88, marking a -0.61% move from the previous day. This change lagged the S&P 500's 0.53% loss on the day. At the same time, the Dow lost 0.47%, and the tech-heavy Nasdaq lost 1%.

Heading into today, shares of the real estate investment trust had gained 1.17% over the past month, lagging the Finance sector's gain of 2.81% and the S&P 500's gain of 2.68% in that time.

Investors will be hoping for strength from O as it approaches its next earnings release, which is expected to be August 5, 2019. The company is expected to report EPS of $0.81, up 1.25% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $360.87 million, up 9.72% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.29 per share and revenue of $1.47 billion. These totals would mark changes of +3.13% and +10.38%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for O. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.16% lower. O currently has a Zacks Rank of #3 (Hold).

In terms of valuation, O is currently trading at a Forward P/E ratio of 21.05. This represents a premium compared to its industry's average Forward P/E of 13.41.

Also, we should mention that O has a PEG ratio of 5.29. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The REIT and Equity Trust - Retail was holding an average PEG ratio of 3.33 at yesterday's closing price.

The REIT and Equity Trust - Retail industry is part of the Finance sector. This group has a Zacks Industry Rank of 147, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Realty Income Corporation (O) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.