Tuesday, October 30, 2018 10:22:07 AM
What's in the Cards for Realty Income (O) in Q3 Earnings?
[Zacks]
Zacks Equity Research
,Zacks•October 30, 2018
Realty Income (O) Q3 performance is likely to exhibit gains from its focus on tenants from service, non-discretionary and Internet-resilient business despite the choppy retail real estate market.
Realty Income (O) Q3 performance is likely to exhibit gains from its focus on tenants from service, non-discretionary and Internet-resilient business despite the choppy retail real estate market.
1 / 2
What's in the Cards for Realty Income (O) in Q3 Earnings?
Realty Income (O) Q3 performance is likely to exhibit gains from its focus on tenants from service, non-discretionary and Internet-resilient business despite the choppy retail real estate market.
Realty Income Corp. O is scheduled to report third-quarter 2018 results after the market closes on Oct 31. The company’s results are estimated to reflect year-over-year rise in funds from operations (FFO) per share and revenues.
In the last reported quarter, this monthly dividend-paying real estate investment trust (REIT) delivered a better-than-expected performance in terms of FFO per share. The company benefited from year-over-year growth in revenues and also enjoyed high occupancy levels.
Notably, Realty Income has a mixed surprise history. The company surpassed estimates in two occasions, met in another and missed in the other, over the trailing four quarters, resulting in an average positive surprise of 0.32%. This is depicted in the graph below:
Realty Income Corporation Price and EPS Surprise
Realty Income Corporation Price and EPS Surprise | Realty Income Corporation Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
Realty Income makes concerted efforts to have a well-diversified portfolio with respect to tenant, industry, geography and property type. Apart from retail properties, the company’s portfolio comprises industrial, office, as well as agricultural properties. This diversification helps it mitigate risks associated with a particular industry, geography or asset type.
Importantly, this freestanding retail REIT derives more than 90% of its annualized retail rental revenues from tenants belonging to service, non-discretionary and low-price retail businesses. Such businesses are less susceptible to economic recessions, as well as competition from Internet retailing.
Realty Income is focused on external growth through exploring accretive acquisition opportunities. The company’s solid underlying real estate quality and prudent underwriting at acquisition has helped the company maintain high occupancy levels consistently. Since 1996, the company’s occupancy level has never been below 96%. The trend is expected to have continued in the to-be-reported quarter as well. Also, its same-store rent growth is likely to exhibit limited operational volatility.
In addition, recovering economy, low unemployment level and rising incomes from tax cuts are likely to spur demand for retail goods. Furthermore, high consumer sentiment, upbeat consumer sales and improving net absorption are likely to aid occupancy levels.
These are expected to have helped the company enjoy higher retail revenues in the Jul-Sep quarter. In fact, the Zacks Consensus Estimate for third-quarter revenues is pegged at $334.2 million, indicating a year-over-year rise of 8.9%. The Zacks Consensus Estimate for rental revenues of $318 million also denotes a projected increase of 8.5% year over year.
Amid these, the Zacks Consensus Estimate for third-quarter FFO per share is 79 cents, indicating 2.6% growth from the comparable period last year.
Nonetheless, despite all these efforts, the choppy retail real estate environment may limit growth momentum to some extent. In addition, the company has substantial exposure to single-tenant assets which raises its risks associated with tenant default. Further, prior to the third-quarter earnings release, there is lack of any solid catalyst. As such, the Zacks Consensus Estimate of FFO per share for Q3 remained unchanged at 79 cents, over the past two months.
Earnings Whispers
Our proven model does not conclusively show that Realty Income will likely beat estimates this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP is -1.61%.
Zacks Rank: Realty Income has a Zacks Rank of 3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of a positive surprise.
https://finance.yahoo.com/news/apos-cards-realty-income-o-223110696.html
"PEACE"
Recent O News
- 646th Consecutive Common Stock Monthly Dividend Declared by Realty Income • PR Newswire (US) • 04/09/2024 08:15:00 PM
- REALTY INCOME ANNOUNCES FIRST QUARTER 2024 EARNINGS RELEASE DATE • PR Newswire (US) • 04/03/2024 08:15:00 PM
- 124th Common Stock Monthly Dividend Increase Declared by Realty Income • PR Newswire (US) • 03/13/2024 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/23/2024 01:16:26 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/22/2024 09:42:06 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 02/22/2024 09:37:00 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/21/2024 09:16:06 PM
- Realty Income Announces Operating Results for the Three Months and Year Ended December 31, 2023 • PR Newswire (US) • 02/20/2024 09:15:00 PM
- Market Cautiousness Ahead of Retail Giants’ Earnings; Oil Prices Dip • IH Market News • 02/20/2024 10:37:35 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/16/2024 10:26:15 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 02/16/2024 10:19:50 PM
- Form 424B7 - Prospectus [Rule 424(b)(7)] • Edgar (US Regulatory) • 02/16/2024 10:12:21 PM
- Form S-3ASR - Automatic shelf registration statement of securities of well-known seasoned issuers • Edgar (US Regulatory) • 02/16/2024 09:52:17 PM
- Form 8-K/A - Current report: [Amend] • Edgar (US Regulatory) • 02/16/2024 09:08:26 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:36:43 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:35:14 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:33:55 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:32:38 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:31:30 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:29:53 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:28:20 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/15/2024 12:27:08 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/14/2024 09:33:30 PM
- Realty Income Announces Appointment of Jeff A. Jacobson to Board of Directors and Retirement of Board Member Ronald L. Merriman • PR Newswire (US) • 02/14/2024 09:15:00 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/14/2024 01:35:18 PM
Coinllectibles' Subsidiary, Grand Town Development Limited, Acquires Rare Song Dynasty Ceramics Worth Over USD28million • COSG • Apr 18, 2024 8:03 AM
ILUS Provides Form 10-K Filing Update • ILUS • Apr 17, 2024 9:54 AM
Glucotrack Announces Expansion of Its Continuous Glucose Monitoring Technology to Epidural Glucose Monitoring • GCTK • Apr 17, 2024 8:00 AM
Maybacks Global Entertainment To Fire Up 24 New Stations in Louisiana • AHRO • Apr 16, 2024 1:30 PM
Cannabix Technologies Begins Certification of Contactless Alcohol Breathalyzer, Re-Brands product series to Breath Logix • BLOZF • Apr 16, 2024 8:52 AM
Kona Gold Beverages, Inc. Acquires Surge Distribution LLC from Loud Beverage Group, Inc. (LBEV) • KGKG • Apr 16, 2024 8:30 AM