This story originally appeared on Zacks
Realty Income Corp. (O) closed at $67.61 in the latest trading session, marking a -0.1% move from the prior day. This change was narrower than the S&P 500’s daily loss of 1.7%.
Heading into today, shares of the real estate investment trust had lost 5.88% over the past month, lagging the Finance sector’s loss of 1.03% and the S&P 500’s loss of 0.27% in that time.
Investors will be hoping for strength from O as it approaches its next earnings release. In that report, analysts expect O to post earnings of $0.91 per share. This would mark year-over-year growth of 12.35%. Our most recent consensus estimate is calling for quarterly revenue of $476.25 million, up 17.72% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.57 per share and revenue of $1.94 billion. These totals would mark changes of +5.31% and +17.6%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for O. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. O is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, O is currently trading at a Forward P/E ratio of 18.95. Its industry sports an average Forward P/E of 16.08, so we one might conclude that O is trading at a premium comparatively.
Meanwhile, O’s PEG ratio is currently 4.34. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The REIT and Equity Trust – Retail industry currently had an average PEG ratio of 2.59 as of yesterday’s close.
The REIT and Equity Trust – Retail industry is part of the Finance sector. This group has a Zacks Industry Rank of 61, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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