Realty Income (O) Q1 AFFO Meets Estimates, Occupancy Falls Y/Y

Realty Income Corporation’s O first-quarter 2024 adjusted funds from operations (AFFO) per share of $1.03 was in line with the Zacks Consensus Estimate. The reported figure also compared favorably with the prior-year quarter’s 93 cents per share.

Results display better-than-anticipated top-line growth. The company benefited from expansionary effects and a healthy pipeline of opportunities globally. Although the portfolio occupancy remained stable sequentially, it declined year over year, affecting the results to some extent.

Total revenues were $1.26 billion, which outpaced the Zacks Consensus Estimate of $1.19 billion. The top line rose 33.5% year over year.

Quarter in Detail

In the first quarter, same-store rental revenues of $843.5 million from 11,716 properties under lease witnessed a rise of 0.8% from the prior-year period.

The portfolio occupancy of 98.6% as of Mar 31, 2024, remained unchanged sequentially and shrunk 40 bps year over year. In the reported quarter, the company achieved a rent recapture rate of 104.3% on re-leasing activity.

In the reported quarter, O invested $598 million in 155 properties and properties under development or expansion.

Balance Sheet

Realty Income exited first-quarter 2024 with $4 billion of liquidity. This comprised cash and cash equivalents of $680.2 million, unsettled At-The-Market forward equity of $62.9 million, and $3.2 billion of availability under its revolving credit facility after deducting $216 million in commercial paper borrowings.

Net debt to annualized pro-forma adjusted EBITDAre was 5.5X.

In the first quarter, the company raised $550.1 billion from the sale of its common stock at a weighted average price of $56.93 per share, mainly through its At-The-Market program.

2024 Guidance

Realty Income kept its guidance for 2024 unrevised.

Management projects 2024 AFFO per share of $4.13-$4.21. The Zacks Consensus Estimate is pegged at $4.16.

Full-year projections assume same-store rent growth of approximately 1% and occupancy of more than 98%. O expects a full-year acquisition volume of approximately $2 billion.

 

Realty Income Corporation Price, Consensus and EPS Surprise

Realty Income Corporation Price, Consensus and EPS Surprise

Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote

 

Realty Income currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Retail REITs

Federal Realty Investment Trust’s FRT first-quarter 2024 funds from operations (FFO) per share of $1.64 missed the Zacks Consensus Estimate by a whisker. The figure marked a rise of 3.1% from the year-ago quarter’s tally of $1.59.

Results reflect a rise in revenues and healthy leasing activity that aided FRT’s first-quarter performance. However, lower occupancy levels affected the results to some extent.

Kimco Realty Corp. KIM reported first-quarter 2024 FFO per share of 39 cents, which beat the Zacks Consensus Estimate of 38 cents. The figure was in line with the year-ago quarter’s tally.

Though KIM reported growth in revenues, a rise in interest expenses acted as a dampener.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

Where Will Stocks Go…

If Biden Wins? If Trump Wins?

The answers may surprise you.

Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!

Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…

1. Medical manufacturer has gained +11,000% in the last 15 years.

2. Rental company is absolutely crushing its sector.

3. Energy powerhouse plans to grow its already large dividend by 25%.

4. Aerospace and defense standout just landed a potentially $80 billion contract.

5. Giant Chipmaker is building huge plants in the U.S. 

Hurry, Download Special Report FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Kimco Realty Corporation (KIM) : Free Stock Analysis Report

Federal Realty Investment Trust (FRT) : Free Stock Analysis Report

Realty Income Corporation (O) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.