Can Realty Income's Resilient Portfolio Fuel Revenue Growth in Q4?

Realty Income O is likely to have witnessed stable operational performance in the fourth quarter of 2025, driven by its well-diversified, high-quality property portfolio. As of the end of the third quarter of 2025, Realty Income owned more than 15,500 properties spanning 92 industries and more than 1,600 clients. The company reported a rent recapture rate of 103.5% across 284 leases and remains active in optimizing its portfolio.

Realty Income generates revenues primarily through long-term net lease agreements, where tenants cover most property expenses, ensuring predictable cash flows. The company derives 91% of its annualized contractual rental revenues from clients with a service, non-discretionary, low price point component to their business as of Sept. 30, 2025. This assures stable revenue generation in the to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.46 billion, which suggests a 9.08% increase from the year-ago quarter’s reported figure.

Realty Income’s four major industries — grocery stores, convenience stores, home improvement, and dollar stores — sell essential goods. They represented 33.1% of the total portfolio annualized base rent as of Sept. 30, 2025. A focus on these industries is likely to result in the generation of steady rental revenues for the company in the fourth quarter. The consensus mark for fourth-quarter 2025 rental revenues (excluding reimbursable) is pegged at $1.30 billion, up from $1.20 billion recorded in the year-ago quarter.

Its expansion efforts are likely to have continued in the fourth quarter, supporting top-line growth and enhancing earnings potential. The company targeted approximately $5.5 billion in investment volume for full-year 2025.

How Did Other Retail REITs Performed?

Simon Property Group, Inc. SPG reported fourth-quarter 2025 revenues of $1.79 billion, which outpaced the Zacks Consensus Estimate of $1.63 billion. Moreover, the reported figure increased 13.2% year over year. Results reflected an increase in revenues, backed by a rise in the base minimum rent per square foot. SPG reported revenues from lease income of $1.64 billion, 14.5% higher than the prior-year period’s figure.

Kimco Realty Corp. KIM reported fourth-quarter 2025 revenues of $542.5 million, which outpaced the consensus mark of $538.3 million. The figure improved 3.3% year over year. Results reflected higher same-property net operating income, driven by improved occupancy and a rise in minimum rents for KIM.

O’s Price Performance, Valuation & Estimates

Shares of Realty Income have increased 16.4% year to date, outperforming both the broader industry and the S&P 500 Index.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 14.63, below the industry but ahead of its one-year median of 13.22. It carries a Value Score of D.

Realty Income’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2025 and 2026 FFO per share has been revised upward over the past month. The Zacks Consensus Estimate for 2025 and 2026 FFO per share suggests 1.9% and 3.8% growth, respectively, year over year.

Realty Income currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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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This article originally published on Zacks Investment Research (zacks.com).

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