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

Zacks Equity Research

In the latest trading session, Realty Income Corp. (O) closed at $49.92, marking a +1.22% move from the previous day. This change lagged the S&P 500's 1.39% gain on the day. Meanwhile, the Dow gained 1.11%, and the Nasdaq, a tech-heavy index, added 1.65%.

Coming into today, shares of the real estate investment trust had lost 15.49% in the past month. In that same time, the Finance sector gained 19.23%, while the S&P 500 gained 25.31%.

Wall Street will be looking for positivity from O as it approaches its next earnings report date. This is expected to be May 4, 2020. In that report, analysts expect O to post earnings of $0.86 per share. This would mark year-over-year growth of 4.88%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $410.94 million, up 15.96% from the year-ago period.

O's full-year Zacks Consensus Estimates are calling for earnings of $3.42 per share and revenue of $1.68 billion. These results would represent year-over-year changes of +3.01% and +12.34%, respectively.

Investors might also notice recent changes to analyst estimates for O. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 2.26% lower. O is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that O has a Forward P/E ratio of 14.41 right now. This represents a premium compared to its industry's average Forward P/E of 7.42.

We can also see that O currently has a PEG ratio of 4.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. REIT and Equity Trust - Retail stocks are, on average, holding a PEG ratio of 3.12 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 169, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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