Realty Income’s Mixed Q4 Results Reveal Growth Amid Challenges

San Diego-based Realty Income Corporation (O) focuses on acquiring and managing freestanding commercial properties that generate rental revenue through long-term net lease agreements. With a significant market capitalization of $50.8 billion, the company’s portfolio encompasses thousands of properties leased to clients across more than 90 industries.

Market Performance Overview

Although Realty Income has lagged the broader market over the past year, it demonstrated improved performance in 2025. The company’s stock has gained 6.7% year-to-date (YTD) and 3.7% over the last 52 weeks. In comparison, the S&P 500 Index ($SPX) has experienced a YTD dip of 3.3% but surged 12.3% over the past year.

When zooming in, Realty Income has outperformed the Real Estate Select Sector SPDR Fund’s (XLRE) YTD increase of 3.1%. However, it fell short of XLRE’s 14.2% gains over the past year.

Financial Results and Analysts’ Outlook

Realty Income’s stock fell by 1.9% following the release of its mixed Q4 results on February 24. The company reported a remarkable 24.5% year-over-year increase in revenues, reaching $1.3 billion, fueled by rising demand and rental rates. However, heightened depreciation, interest expenses, and provisions for impairment negatively affected profitability. Despite these challenges, its adjusted funds from operations (AFFO) attributable to common shareholders climbed by 26.1% year-over-year to $921.9 million. Due to a rise in outstanding shares, AFFO per share rose modestly by 4% year-over-year to $1.05, falling short of Wall Street expectations by nearly 1%.

For fiscal 2025, analysts anticipate a 1.9% year-over-year growth in AFFO per share, projecting it to reach $4.27. Realty Income has missed Wall Street’s AFFO estimates once in the past four quarters but has met or exceeded projections three other times.

Analyst Ratings and Price Targets

Realty Income currently holds a consensus “Moderate Buy” rating. Of the 23 analysts covering the stock, there are five “Strong Buys,” one “Moderate Buy,” and 17 “Holds.”

This rating situation is slightly less positive than three months ago, when six analysts had assigned “Strong Buy” ratings to the stock. On April 22, Barclays (BCS) analyst Richard Hightower maintained an “Overweight” rating but reduced the price target from $59 to $58.

Realty Income’s mean price target stands at $60.84, implying a 6.8% premium to current price levels. Meanwhile, the highest price target from analysts reaches $65.50, suggesting a potential upside of 15%.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.