Should You Buy, Hold or Sell Realty Income Stock Ahead of Q1 Earnings?

Core Viewpoint - Realty Income Corporation is expected to report its first-quarter 2025 results on May 5, with adjusted funds from operations (FFO) estimated at $1.06 per share and revenues at $1.38 billion, indicating year-over-year growth [1][2]. Financial Estimates - The Zacks Consensus Estimate for first-quarter 2025 adjusted FFO per share remains unchanged at $1.06, reflecting a 2.9% increase year-over-year [2]. - Quarterly revenues are projected to rise by 9.2% year-over-year, reaching $1.38 billion [2][13]. - For the current year, total revenues are estimated at $5.58 billion, representing a 5.9% increase from the previous year [6]. Performance Trends - Over the last four quarters, Realty Income's adjusted FFO per share has surpassed the Zacks Consensus Estimate once, met expectations twice, and missed once [6]. - The company has maintained a strong balance sheet, with a credit rating of A3/A- and $3.7 billion in liquidity as of December 31, 2024 [11]. Business Model and Strategy - Realty Income's diversified real estate portfolio is expected to support consistent operational performance, with an occupancy rate of 98.7% as of December 31, 2024, projected to remain above 98% for the year [9][10]. - The company is expanding its portfolio beyond traditional retail into sectors like industrial, gaming, and data centers, with a target investment volume of approximately $4 billion for 2025 [12]. Market Position and Valuation - Realty Income shares have increased by 6.9% year-to-date, closing at $57.17, while the broader REIT and Equity Trust - Retail industry has declined by 6.6% [15]. - The stock is trading at a forward 12-month price-to-FFO of 13.89X, below the industry average of 15.21X, indicating a relative discount compared to peers [18][19]. Investment Outlook - Realty Income is recognized as a top dividend stock, combining reliable income with growth potential, supported by a diversified tenant base and a long-term net lease model [22]. - Investors may consider waiting for more clarity on economic conditions before making investment decisions, while existing shareholders are encouraged to maintain their positions due to the company's solid asset portfolio and reliable dividend growth [23].