Is Realty Income Corporation (O) overvalued?
On Equity Rank's model estimate, O trades close to its fair value (2% below it). Realty Income Corporation (O) last closed at $59.04; the multi-method model fair value is $60.24.
| Price | Model fair value | Price vs model |
|---|---|---|
| $59.04 | $60.24 | 2% below |
What the answer rests on
- 3 of 12 valuation methods put O's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, O's free cash flow would need to grow about -1.3% a year for ten years (a reverse discounted cash flow).
- O trades at 40.6 times its last year's earnings, against a median of 26.8 for 107 profitable Real Estate companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 20% below to 1% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind O's fair value · What prices assume · Other companies