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Realty Income Corp. (O) Gains But Lags Market: What You Should Know

Zacks Equity Research

Realty Income Corp. (O) closed at $70.73 in the latest trading session, marking a +0.1% move from the prior day. The stock lagged the S&P 500's daily gain of 0.46%. Elsewhere, the Dow gained 0.9%, while the tech-heavy Nasdaq added 0.59%.

Prior to today's trading, shares of the real estate investment trust had lost 2.81% over the past month. This has lagged the Finance sector's gain of 2.79% and the S&P 500's gain of 4.04% in that time.

Wall Street will be looking for positivity from O as it approaches its next earnings report date. This is expected to be August 5, 2019. On that day, O is projected to report earnings of $0.81 per share, which would represent year-over-year growth of 1.25%. Meanwhile, our latest consensus estimate is calling for revenue of $360.87 million, up 9.72% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.30 per share and revenue of $1.47 billion, which would represent changes of +3.45% and +10.38%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for O. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. O is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note O's current valuation metrics, including its Forward P/E ratio of 21.43. This represents a premium compared to its industry's average Forward P/E of 13.64.

Investors should also note that O has a PEG ratio of 4.8 right now. 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. REIT and Equity Trust - Retail stocks are, on average, holding a PEG ratio of 3.33 based on yesterday's closing prices.

The REIT and Equity Trust - Retail industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 173, which puts it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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