Where Will Realty Income Stock Be in 1 Year?

Core Viewpoint - Realty Income is poised for a potential recovery in its stock price due to anticipated interest rate cuts, which could enhance its financial performance and attractiveness to investors [1][4][13]. Group 1: Company Overview - Realty Income specializes in single-tenant net-leased properties and has built a substantial portfolio over 56 years, owning or holding interest in over 15,600 properties as of the end of Q2 2025, compared to just above 6,500 properties at its peak in February 2020 [7]. - The company has consistently increased its monthly dividend, including during the pandemic, with a current annual dividend of nearly $3.23 per share, resulting in a dividend yield of 5.5%, significantly higher than the S&P 500 average of 1.2% [8]. Group 2: Financial Performance - In the first half of 2025, Realty Income reported revenue of $2.8 billion, reflecting a 7% increase compared to the same period in 2024, while expenses grew by 6%, with interest payments rising by 13% [9]. - The company achieved nearly $447 million in net income attributable to common shareholders in the first two quarters of 2025, marking a 16% year-over-year increase despite higher interest rates [10]. - Realty Income's funds from operations (FFO) for the trailing 12 months exceeded $3.65 billion, resulting in a price-to-FFO ratio of just under 15, which could enhance its attractiveness in a declining interest rate environment [11]. Group 3: Market Outlook - A widely expected interest rate cut in September, with a 95% probability according to futures traders, could serve as a catalyst for Realty Income's stock recovery [4]. - Treasury Secretary Scott Bessent speculated that the rate cut could be as high as 0.5%, which is more than the previously anticipated 0.25% [5]. - If the forecasted interest rate cut occurs, Realty Income may have increased capacity to refinance debt and pursue property acquisitions, potentially boosting profits and accelerating stock price recovery [14].