Scotiabank and Jefferies Update Outlook on Realty Income (O) Amid REIT Valuation Concerns

Realty Income Corporation (NYSE:O) ranks among the best real estate and realty stocks to invest in according to hedge funds. On June 18, Scotiabank reduced its price objective for Realty Income Corporation (NYSE:O) to $67 from $72, maintaining an Outperform rating on the stock. Coming off a solid start to the year, the firm believes REIT valuations are less attractive.

Scotiabank altered its subsector stance to align with its “relative valuation-versus-growth framework.” The firm stays most hopeful about seniors housing and has upgraded its rating on self-storage and net leasing to Overweight from Marketweight.

Meanwhile, on June 1, Jefferies assumed coverage of Realty Income Corporation (NYSE:O) with a Buy rating and a price target of $69, a decrease from $75. Analyst Joe Dickstein acknowledged investor concerns that the company’s size has made consistent adjusted funds from operations per share growth substantially more difficult to achieve.

Additionally, the analyst looked at whether increasing complexity from structured investments, private equity, and Europe is a long-term value generator or an operational distraction. Jefferies believes these levers will help improve adjusted funds from operations per share growth.

Realty Income Corporation (NYSE:O) is a real estate investment trust focused on acquiring, owning, and managing freestanding commercial properties. These properties are leased under long-term net lease agreements to a diversified group of tenants, including investment-grade, investment-grade-equivalent, and other operators.

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