Mizuho Securities analyst Haendel St. Juste maintained a Buy rating on Realty Income (O – Research Report) on February 20 and set a price target of $60.00.
Haendel St. Juste has given his Buy rating due to a combination of factors concerning Realty Income’s strong financial performance and strategic acquisitions. Realty Income’s fourth quarter adjusted funds from operations (AFFO) per share showed a modest year-over-year growth, and their guidance for the fiscal year 2024 suggests further AFFO growth, indicating a robust financial outlook. This growth forecast is particularly impressive because it does not hinge on additional capital raising, which is significant in the current environment of volatile interest rates and costly capital. Furthermore, the company’s stock has underperformed relative to the market, suggesting a potential undervaluation that could offer a buying opportunity.
St. Juste’s optimism also stems from Realty Income’s prudent capital deployment and the strategic nature of its acquisitions. In the fourth quarter, the company managed to acquire properties at favorable cap rates, despite a challenging rate environment. Additionally, there is a notable shift towards more geographic diversification with increased European exposure, which could mitigate risks and open up new growth avenues. Realty Income’s disciplined investment approach, ensuring a healthy spread between its weighted average cost of capital and investment returns, further solidifies the basis for the Buy rating. The company’s ability to fund future acquisitions through internally generated cash flow and existing credit facilities without diluting equity is another strong point underpinning St. Juste’s positive outlook.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $65.00 price target.
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Realty Income (O) Company Description:
Realty Income Corp. is a real estate company, which engages in generating dependable monthly cash dividends from a consistent and predictable level of cash flow from operations. It operates through Rental segment. The company was founded by William E. Clark, Jr. and Evelyn Joan Clark in 1969 and is headquartered in San Diego, CA.
Read More on O:
- Realty Income Corporation Earnings Report: Is it a Beat?
- Realty Income Publishes Financial Performance Breakdown
- Realty Income sees FY24 AFFO $4.13-$4.21, consensus $4.20
- Realty Income reports Q4 AFFO $1.01, consensus $1.02
- Realty Income Announces Operating Results for the Three Months and Year Ended December 31, 2023
