Mizuho Securities Starts Realty Income (O) at Neutral
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Mizuho Securities initiates coverage on Realty Income (NYSE: O) with a Neutral rating and a price target of $65.00.
Analyst Haendel St. Juste commented, "We are initiating coverage of Realty Income (O) with a Neutral rating and a $65 price target. We think O’s lower risk business model, investment grade rating, better quality and diversified portfolio, and attractive dividend yield (monthly payout) are attractive propositions in the current low yield, ‘risk-off’ environment. This is further supplemented by O's robust acquisition activity that should continue near-term and at historically wide investment spreads that combined should generate continued NAV and earnings growth. Net-net, we think the stock’s frothy valuation (most expensive among our coverage REITs) fairly reflects those advantages, in our view, and we see potential risk to valuation on a potential hike in rates (not likely nearterm), if the market returns to a ‘risk-on’ stance (and capital flows away to other cheaper, “riskier” sectors) or if earnings (i.e., acquisitions) disappoint."
Shares of Realty Income closed at $61.67 yesterday.
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