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Is Realty Income Stock a Buy, Hold, or Sell Before Q3 Earnings?
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Key Takeaways
{\"0\":\"Realty Income will release Q3 2025 results on Nov. 3, with AFFO and revenues expected to rise year over year.\",\"1\":\"The company\'s stable 98% occupancy and diversified portfolio likely supported steady Q3 performance.\",\"2\":\"Expansion into data centers and European markets highlights Realty Income\'s ongoing growth strategy.\"}
Realty Income Corporation (O - Free Report) , a leader in the net lease sector, is slated to release third-quarter 2025 results on Nov. 3, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s adjusted funds from operations (AFFO) and revenues is pegged at $1.07 per share and $1.42 billion, respectively.
The Zacks Consensus Estimate for third-quarter 2025 AFFO per share has remained unrevised at $1.07 over the past two months. It suggests 1.90% growth year over year. The Zacks Consensus Estimate for quarterly revenues implies a notable year-over-year increase of 6.61%.
Image Source: Zacks Investment Research
For the current year, the Zacks Consensus Estimate for Realty Income’s revenues is pegged at $5.63 billion, implying a rise of 6.72% year over year. The consensus mark for 2025 AFFO per share stands at $4.27, calling for an expansion of around 1.91% on a year-over-year basis.
Over the trailing four quarters, the company’s AFFO per share met the Zacks Consensus Estimate on two occasions for as many misses. This is depicted in the graph below:
Here Is What Our Quantitative Model Predicts for O
Our proven model predicts a surprise in terms of AFFO per share for Realty Income this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Realty Income currently carries a Zacks Rank of 3 and has an Earnings ESP of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Realty Income’s Q3 Likely Marked by Stability and Strength
Realty Income is likely to have witnessed stable operational performance in the third quarter of 2025, driven by its well-diversified, high-quality property portfolio. A large share of its rental revenues comes from tenants with non-discretionary, low price point and service-oriented focus, supporting steady cash flow. Its disciplined acquisition strategy and emphasis on high-performing assets likely continued to underpin portfolio strength and operational consistency during the period.
As of June 30, 2025, the company reported a strong 98.6% occupancy rate, which is expected to have remained above 98% through the third quarter. This sustained occupancy, reflecting prudent underwriting and resilient tenant demand, is likely to have supported earnings stability. Realty Income’s focus on defensive sectors and proactive asset management is believed to have further enhanced portfolio durability.
The company is also expected to have benefited from ongoing diversification beyond retail into industrial, gaming, and data center assets. Its partnership with Digital Realty (DLR - Free Report) highlights its forward-focused approach, supporting entry into the growing digital infrastructure space. Apart from its collaboration with Digital Realty, it is eyeing expansion in Europe and is targeting $5 billion in investments for 2025.
On the balance sheet front, the company is likely to have maintained a strong financial footing, backed by investment-grade credit ratings of A3 from Moody’s and A- from S&P. Its capital structure is expected to have remained sound, with manageable leverage, a well-laddered debt maturity profile, and ample liquidity, all of which are likely to have enhanced flexibility to fund growth and manage refinancing risk.
The consensus mark for rental revenues (excluding reimbursable) is pegged at $1.28 billion, up from $1.25 billion recorded in the prior quarter and $1.20 billion in the year-ago quarter.
Despite its strengths, Realty Income faces certain challenges. The company’s 2025 guidance factors in roughly 75 basis points of expected rent loss, above historical norms, mainly stemming from tenants added through previous mergers and acquisitions. The presence of financially weaker tenants introduces near-term uncertainty and may put pressure on cash flow reliability.
O’s Price Performance & Valuation
Shares of Realty Income have rallied 8.4% so far in the year, closing at $57.91 yesterday on the NYSE. The Zacks REIT and Equity Trust - Retail industry has declined 6.6%, while the S&P 500 composite has increased 18.6% over the same time frame.
YTD Price Performance
Image Source: Zacks Investment Research
Valuation-wise, Realty Income trades at a forward price-to-FFO of 13.22X, below the retail REIT industry average of 14.74X and slightly above its one-year median of 13.16X. The stock appears reasonably priced versus its peers. It is cheaper than Agree Realty Corporation (ADC - Free Report) yet somewhat pricier than NNN REIT (NNN - Free Report) . Agree Realty is trading at a forward 12-month price-to-FFO of 16.23X, while NNN is trading at 11.59X. However, its Value Score of D suggests that it may not be a bargain at current levels.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
How to Play Realty Income Stock Ahead of Q3 Earnings
Realty Income continues to stand out as a dependable income-oriented REIT, offering a strong blend of stability and measured growth. Its diversified portfolio, essential-service tenant mix, and long-term net lease structure underpin steady cash flows, while expansion into gaming and data centers through partnerships like Digital Realty enhances long-term relevance. The company’s 5.54% dividend yield and investment-grade balance sheet further solidify its appeal for income-seeking investors.
That said, near-term growth prospects remain tempered by macroeconomic uncertainty. With the stock trading at a modest discount to peers such as Agree Realty, patience may be warranted until greater clarity emerges on economic momentum.
Given its balanced risk-reward profile, it is better to hold Realty Income. Existing investors can continue benefiting from its dependable dividends and defensive portfolio, while prospective buyers may prefer to wait for a more attractive entry point.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Is Realty Income Stock a Buy, Hold, or Sell Before Q3 Earnings?
Key Takeaways
Realty Income Corporation (O - Free Report) , a leader in the net lease sector, is slated to release third-quarter 2025 results on Nov. 3, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s adjusted funds from operations (AFFO) and revenues is pegged at $1.07 per share and $1.42 billion, respectively.
The Zacks Consensus Estimate for third-quarter 2025 AFFO per share has remained unrevised at $1.07 over the past two months. It suggests 1.90% growth year over year. The Zacks Consensus Estimate for quarterly revenues implies a notable year-over-year increase of 6.61%.
Image Source: Zacks Investment Research
For the current year, the Zacks Consensus Estimate for Realty Income’s revenues is pegged at $5.63 billion, implying a rise of 6.72% year over year. The consensus mark for 2025 AFFO per share stands at $4.27, calling for an expansion of around 1.91% on a year-over-year basis.
Over the trailing four quarters, the company’s AFFO per share met the Zacks Consensus Estimate on two occasions for as many misses. This is depicted in the graph below:
Realty Income Corporation Price and EPS Surprise
Realty Income Corporation price-eps-surprise | Realty Income Corporation Quote
Here Is What Our Quantitative Model Predicts for O
Our proven model predicts a surprise in terms of AFFO per share for Realty Income this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Realty Income currently carries a Zacks Rank of 3 and has an Earnings ESP of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Realty Income’s Q3 Likely Marked by Stability and Strength
Realty Income is likely to have witnessed stable operational performance in the third quarter of 2025, driven by its well-diversified, high-quality property portfolio. A large share of its rental revenues comes from tenants with non-discretionary, low price point and service-oriented focus, supporting steady cash flow. Its disciplined acquisition strategy and emphasis on high-performing assets likely continued to underpin portfolio strength and operational consistency during the period.
As of June 30, 2025, the company reported a strong 98.6% occupancy rate, which is expected to have remained above 98% through the third quarter. This sustained occupancy, reflecting prudent underwriting and resilient tenant demand, is likely to have supported earnings stability. Realty Income’s focus on defensive sectors and proactive asset management is believed to have further enhanced portfolio durability.
The company is also expected to have benefited from ongoing diversification beyond retail into industrial, gaming, and data center assets. Its partnership with Digital Realty (DLR - Free Report) highlights its forward-focused approach, supporting entry into the growing digital infrastructure space. Apart from its collaboration with Digital Realty, it is eyeing expansion in Europe and is targeting $5 billion in investments for 2025.
On the balance sheet front, the company is likely to have maintained a strong financial footing, backed by investment-grade credit ratings of A3 from Moody’s and A- from S&P. Its capital structure is expected to have remained sound, with manageable leverage, a well-laddered debt maturity profile, and ample liquidity, all of which are likely to have enhanced flexibility to fund growth and manage refinancing risk.
The consensus mark for rental revenues (excluding reimbursable) is pegged at $1.28 billion, up from $1.25 billion recorded in the prior quarter and $1.20 billion in the year-ago quarter.
Despite its strengths, Realty Income faces certain challenges. The company’s 2025 guidance factors in roughly 75 basis points of expected rent loss, above historical norms, mainly stemming from tenants added through previous mergers and acquisitions. The presence of financially weaker tenants introduces near-term uncertainty and may put pressure on cash flow reliability.
O’s Price Performance & Valuation
Shares of Realty Income have rallied 8.4% so far in the year, closing at $57.91 yesterday on the NYSE. The Zacks REIT and Equity Trust - Retail industry has declined 6.6%, while the S&P 500 composite has increased 18.6% over the same time frame.
YTD Price Performance
Image Source: Zacks Investment Research
Valuation-wise, Realty Income trades at a forward price-to-FFO of 13.22X, below the retail REIT industry average of 14.74X and slightly above its one-year median of 13.16X. The stock appears reasonably priced versus its peers. It is cheaper than Agree Realty Corporation (ADC - Free Report) yet somewhat pricier than NNN REIT (NNN - Free Report) . Agree Realty is trading at a forward 12-month price-to-FFO of 16.23X, while NNN is trading at 11.59X. However, its Value Score of D suggests that it may not be a bargain at current levels.
Forward 12 Month Price-to-FFO (P/FFO) Ratio
Image Source: Zacks Investment Research
How to Play Realty Income Stock Ahead of Q3 Earnings
Realty Income continues to stand out as a dependable income-oriented REIT, offering a strong blend of stability and measured growth. Its diversified portfolio, essential-service tenant mix, and long-term net lease structure underpin steady cash flows, while expansion into gaming and data centers through partnerships like Digital Realty enhances long-term relevance. The company’s 5.54% dividend yield and investment-grade balance sheet further solidify its appeal for income-seeking investors.
That said, near-term growth prospects remain tempered by macroeconomic uncertainty. With the stock trading at a modest discount to peers such as Agree Realty, patience may be warranted until greater clarity emerges on economic momentum.
Given its balanced risk-reward profile, it is better to hold Realty Income. Existing investors can continue benefiting from its dependable dividends and defensive portfolio, while prospective buyers may prefer to wait for a more attractive entry point.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.