Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Realty Income Corporation (NASDAQ: O) is a REIT that invests in people and places to deliver dependable monthly dividends. It generates monthly dividends by the cash flow from over 11,700 real estate properties owned under long-term net lease agreements with commercial clients.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart below, which together forms ~45.60% of the total shareholding.

1.4 Key Metrics:

The business’s operating fundamentals stayed healthy as reflected from the occupancy of 98.9% in 3QFY22 and the rent recapture rate stood at 108.5% on properties re-leased. Further, the company has reported an uptick in EBITDA margin to reach 91.9% in 3QFY22 from 89.2% in 3QFY21. Further, the company reported a healthy improvement in debt-to-equity ratio to 0.61x in 3QFY22 from 0.70x in 3QFY21, depicting the reasonable leverage position of the company.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Insights of 3QFY22:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 10, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.