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

Zacks Equity Research

Realty Income Corp. (O) closed the most recent trading day at $68.74, moving -1.94% from the previous trading session. This change lagged the S&P 500's 0.62% loss on the day. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq lost 0.74%.

Prior to today's trading, shares of the real estate investment trust had lost 4.35% over the past month. This has lagged the Finance sector's gain of 2.07% and the S&P 500's gain of 2.8% 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. In that report, analysts expect O to post earnings of $0.81 per share. This would mark year-over-year growth of 1.25%. Our most recent consensus estimate is calling for quarterly revenue of $360.87 million, up 9.72% from the year-ago period.

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.

Investors should also note any recent changes to analyst estimates for O. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.09% lower. O currently has a Zacks Rank of #3 (Hold).

Digging into valuation, O currently has a Forward P/E ratio of 21.28. This valuation marks a premium compared to its industry's average Forward P/E of 13.4.

Meanwhile, O's PEG ratio is currently 4.76. 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. The REIT and Equity Trust - Retail industry currently had an average PEG ratio of 3.29 as of yesterday's close.

The REIT and Equity Trust - Retail industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 40% 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.

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