There is a number that matters more to Realty Income Corporation (O) than anything in its own reports, and recently it went above 5.20%. That is the 10-year Treasury, at a level not seen since 2007, only days
Summary
- Realty Income Corporation is rated Sell due to a 5%+ 10-year Treasury yield eroding its dividend and business model.
- With $14.5B of sub-4% debt maturing by 2029, refinancing at higher rates threatens AFFO and valuation.
- Private capital ventures and data center expansion add risk and deliver minimal earnings benefit versus traditional real estate operations.
- My NAV analysis supports a fair value of ~$50/share, below current levels, with downside risk if cap rates rise further.
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