Mizuho Securities analyst Haendel St. Juste has maintained their neutral stance on O stock, giving a Hold rating yesterday.
Haendel St. Juste has given his Hold rating due to a combination of factors impacting Realty Income’s financial outlook. The company’s guidance for 2025 suggests a modest growth in AFFO per share, which falls short of both Mizuho’s and the market’s expectations. This tepid growth outlook is partly attributed to Realty Income’s elevated weighted average cost of capital, which limits its ability to raise and deploy capital effectively.
Furthermore, the recent acquisition of the 7-Eleven portfolio, while increasing the volume of acquisitions, has resulted in lower cap rates, affecting the company’s yield. The concentration of tenants in certain sectors, such as convenience stores and grocers, also raises concerns about diversification. Additionally, Realty Income’s reliance on equity raising through its ATM program indicates a need for more capital, which could further impact its financial flexibility. These factors collectively contribute to the Hold rating as they present challenges to achieving significant earnings growth.
According to TipRanks, St. Juste is a 4-star analyst with an average return of 3.6% and a 53.90% success rate. St. Juste covers the Real Estate sector, focusing on stocks such as Essex Property, Agree Realty, and Equity Residential.
In another report released yesterday, Scotiabank also maintained a Hold rating on the stock with a $59.00 price target.