Realty Income Reports Another Solid Quarter of Low but Steady Growth

Second-quarter results for Realty Income were in line with our estimates, leading us to reaffirm our $76 fair value estimate for the no-moat company. Economic occupancy remained flat at 99.2%, in line with our estimate. Re-leasing spreads for the total company were 5.6% in the second quarter, slightly better than our estimate of new rents being 4.5% higher over prior rent levels. Same-store net operating income growth was 2% for the quarter, which makes the 3% year-to-date figure in line with our current estimate. Adjusted funds from operations were $0.97 per share in the second quarter, which is a penny better than our estimate and 9 cents better than the figure the company reported in the second quarter of 2021.