Analyst John Kilichowski of Wells Fargo reiterated a Hold rating on Realty Income (O – Research Report), with a price target of $59.00.
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John Kilichowski has given his Hold rating due to a combination of factors including Realty Income’s performance and market conditions. The company’s financial results for the first quarter were largely in line with expectations, with core FFO and AFFO figures slightly below Wells Fargo’s estimates but matching the broader market consensus. The reaffirmation of the AFFO per share guidance indicates stability, yet the slight decline in occupancy rates and consistent non-reimbursable expenses suggest some areas of concern.
Additionally, Realty Income’s investment activity has been robust, with significant acquisitions yielding favorable cash returns. However, the unchanged leverage ratio and the company’s liquidity position, while solid, do not indicate a strong enough catalyst for an upgrade in rating. The anticipated stability in cap rates and the unchanged bad debt assumptions further support a cautious stance, leading to the Hold recommendation.
In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $62.00 price target.