Realty Income Corporation

$65.66 USD 60.6B market cap February 15, 2026

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Realty Income Corporation O BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

Price$65.66

Market CapUSD 60.6B

EVUSD 89.0B

Net DebtUSD 28.3B

Shares0.92B

2 BUSINESS

Realty Income is the world's largest net-lease REIT, owning 15,500+ freestanding commercial properties across the US and Europe, leased to 1,600+ tenants under long-term triple-net leases. Revenue comes from contractual rent with built-in escalators averaging ~1-2% annually. Known as "The Monthly Dividend Company" with 667+ consecutive monthly dividends paid since 1969.

Revenue: USD 5.3B Organic Growth: 0.5%

3 MOAT WIDE

Scale/cost advantage is dominant — largest net-lease REIT with A3/A- credit rating gives lowest cost of capital in the sector. Can absorb $1B+ deals competitors cannot. 15,500+ property diversification means no single tenant failure is catastrophic (top tenant 7-Eleven = only 3.3% of rent). Brand as "The Monthly Dividend Company" with 30+ year track record creates investor loyalty and preferential access to capital. GIC partnership (Jan 2026) adds private capital channel reducing equity dependence.

4 MANAGEMENT

CEO: Sumit Roy (since 2018)

A-grade capital allocation. Executed VEREIT ($11B, 2021), Spirit Realty ($9.3B, 2024), and GIC partnership ($1.7B, 2026) while maintaining 5.4x leverage. 93% of CEO comp is stock-based. First-ever $2B buyback authorized Feb 2025. AFFO payout ratio declining from 83% to 75% — increasing retained earnings for growth.

5 ECONOMICS

44.2% Op Margin

4.5% ROIC

USD 3.7B FCF

5.4x Debt/EBITDA

6 VALUATION

FCF/ShareUSD 4.26

FCF Yield6.5%

DCF RangeUSD 62 – 85

3.5% AFFO growth years 1-5, 2.5% years 6-10, 2% terminal growth, 8.5% discount rate (REIT cost of equity). Range reflects 7.5-9.5% discount rate sensitivity.

7 MUNGER INVERSION -18.5%

Kill Event	Severity	P()	E[Loss]
Sustained high rates (10Y > 5%) for 5+ years	-30%	25%	-7.5%
REIT sector structural de-rating	-35%	10%	-3.5%
Major tenant bankruptcies (3+ top-20)	-25%	10%	-2.5%
Regulatory changes to REIT tax status	-40%	5%	-2.0%
Acquisition integration failures	-15%	10%	-1.5%
European expansion losses / FX headwinds	-10%	15%	-1.5%

Tail Risk: Doom loop scenario: sustained high rates + tenant bankruptcies + forced dilutive equity issuance creating a self-reinforcing decline. Low probability (<5%) but could result in 50%+ permanent capital loss. Mitigated by A-rated balance sheet, 98.7% occupancy, and 30-year track record through multiple rate cycles.

8 KLARMAN LENS

Downside Case

In a bear case, 10-year rates stay above 5% through 2030, compressing REIT valuations to 12x AFFO. O would trade at ~$51 (12 x $4.26). Dividend yield of 6.4% at that price provides a floor. Total return in bear case: ~2% annually (yield minus some AFFO dilution from costly equity).

Why Market Wrong

The market treats O purely as a bond proxy, pricing it on the 10Y spread. But O is NOT a bond — it owns real assets with built-in rent escalators (1-2%), active management (7%+ acquisition yields vs 4-5% cost of debt), and inflation protection through NNN lease structures. The GIC partnership also unlocks a non-dilutive growth channel the market hasn't fully priced.

Why Market Right

The bears may be right that REIT cost of equity is structurally higher in a 4%+ rate world. O's 5.4x leverage means ~$28.7B of debt to service/refinance. If spreads widen in a credit event, refinancing costs could crimp AFFO growth. The 4.93% yield is only 70bp above the risk-free rate — historically low for a leveraged real estate vehicle.

Catalysts

1) Fed rate cuts (2026-2027) would expand P/AFFO multiple 2) GIC partnership earnings accretion visible by mid-2026 3) First share buyback execution demonstrates capital discipline 4) Q4 2025 earnings (Feb 24, 2026) may show accelerating AFFO growth 5) Mexico industrial portfolio ramp as nearshoring accelerates

9 VERDICT WAIT

A- T2 Resilient

Strong Buy$49

Buy$56

Sell$105

Realty Income is a high-quality compounder with a wide moat, A-rated balance sheet, and 30+ year dividend track record. At $65.66 (15.4x AFFO, 4.93% yield), it's fairly valued but lacks sufficient margin of safety for a new position. Accumulate below $56 for 20% MOS; strong buy below $49. Expected total return at current price is ~8% annually (5% yield + 3% AFFO growth) — acceptable for income investors but below our 10%+ hurdle for new capital deployment.

🧠 ULTRATHINK Deep Philosophical Analysis

O — Ultrathink Analysis

The Real Question

What are we actually buying when we buy Realty Income?

Strip away the "Monthly Dividend Company" marketing, the S&P 500 index inclusion, the 667 consecutive monthly payments — and what remains is a financial intermediary. Realty Income borrows money at A-rated corporate bond rates (3.5-5%) and lends it to retailers through long-term leases at 7%+ yields. The 200-300bp spread is their entire business.

The real question isn't "Is this a good REIT?" — it's "Is this spread sustainable and is it priced correctly?"

The answer is nuanced. The spread itself is probably durable. Freestanding single-tenant commercial real estate is a fragmented, relationship-intensive market where O's scale creates genuine advantages — lower cost of capital, larger deal capacity, broader tenant relationships. No one else can do what O does at their scale. The question is whether the stock price already reflects this quality.

Hidden Assumptions

The market's pricing of O embeds several assumptions worth examining:

Assumption 1: Interest rates will normalize. O at 15.4x AFFO implicitly assumes that the current rate environment is temporary. If 4.5%+ 10-year rates are the new normal (not just a cycle), then a 5% REIT yield is insufficient compensation for the leverage risk, and fair value is closer to 12-13x AFFO ($51-$55).

Assumption 2: Net-lease retail is resilient. 80% of O's portfolio is retail. The market seems to agree that "essential retail" (grocery, convenience, dollar stores, drugstores) is structurally sound. But this category represented only 35% of O's rent a decade ago — the portfolio has been deliberately repositioned. The question is whether today's "essential" categories remain essential in 10 years. Dollar stores are facing margin pressure. Drug stores are closing locations. Convenience stores face EV-charging disruption.

Assumption 3: Scale advantages compound. The GIC partnership, private capital initiatives, and international expansion all assume that bigger = better in net-lease. This is probably true up to a point, but there's a ceiling. At some scale, O becomes the market — it can't grow faster than the total addressable market of net-lease properties without lowering its quality bar.

The Contrarian View

What would have to be true for the bears to be right?

The structural bear case requires believing that REITs as a vehicle are permanently impaired in a higher-rate world. If the "right" 10-year yield is 5% and stays there, then O's cost of equity is probably 9-10%, meaning acquisitions need 8%+ yields to be accretive — and those are increasingly hard to find in a competitive market. The bull case for O has always been "buy at 7%, finance at 4%, keep the spread." If financing costs are permanently 5.5%+, the spread narrows to a razor-thin margin that doesn't compensate for execution risk.

This is plausible. The 40-year decline in interest rates (1981-2021) created an extraordinary tailwind for leveraged real estate. REITs may have been the beneficiaries of a one-time structural trend that has now reversed.

But there's a counter-argument the bears miss: O doesn't need external growth to deliver acceptable returns. At a 75% AFFO payout ratio, O retains ~~$1.00/share of AFFO annually. With $4.26 in AFFO and a $3.24 dividend, the retained AFFO plus built-in rent escalators (~~1.5%) can drive 3-4% organic AFFO growth without any equity issuance. Add the 4.93% dividend yield and you get 8-9% total returns purely from the existing portfolio. That's not exciting, but it's not broken either.

Simplest Thesis

Realty Income is a toll bridge on American retail real estate — collect rent from 15,500 locations, pay shareholders monthly, grow through disciplined acquisition of the spread between borrowing costs and lease yields.

Why This Opportunity Exists

There is no great opportunity here — and recognizing that is important.

O is widely followed, well understood, efficiently priced. It trades at roughly fair value. The "opportunity" that existed in late 2023 (stock at $50, 7% yield) has largely closed as the stock recovered toward $66. What remains is a high-quality compounder priced for mid-to-high single-digit returns.

The more interesting question is when the opportunity might recur. History suggests O offers truly attractive entry points once every 3-5 years, usually during:

Interest rate spikes (2013, 2018, 2022-2023)
Recession fears (2020)
REIT-specific sentiment washouts

The patient investor's edge is simply being ready when these moments arrive. Having analyzed O thoroughly now means we can act decisively when Mr. Market offers a 20-30% discount — which he will, eventually.

What Would Change My Mind

Bullish catalysts that could make me buy now:

Stock drops below $56 on a broad market sell-off (20% MOS)
Fed signals aggressive rate cuts bringing 10Y below 3.5%
GIC partnership generates visible fee income exceeding expectations

Bearish signals that would kill the thesis:

Occupancy drops below 95% for two consecutive quarters — would indicate structural tenant weakness, not cyclical
AFFO per share declines for two consecutive years — would break the 14-year growth streak and suggest the acquisition model is broken
Net Debt/EBITDA exceeds 7.0x — would indicate management has lost financial discipline
Dividend cut — unthinkable for "The Monthly Dividend Company" but would destroy the brand moat and indicate severe distress

The Soul of This Business

The soul of Realty Income is predictability.

In a world of technological disruption, geopolitical uncertainty, and market volatility, O offers something increasingly rare: a predictable, growing cash flow stream backed by real assets and contractual obligations. The company has raised its dividend for 113 consecutive quarters. It has maintained occupancy above 96% through the dot-com bust, the Great Financial Crisis, and COVID-19.

This predictability is simultaneously O's greatest strength and its limitation. It will never be a 20% compounder. It will never disrupt an industry. It will never make investors rich quickly. But it will almost certainly still be paying monthly dividends 20 years from now, and those dividends will almost certainly be higher than today.

For a certain type of investor — one who values sleep-well-at-night reliability over exciting returns — Realty Income is as close to a perfect holding as exists in public markets. The competitive position is not "inevitable" (nothing truly is), but it is deeply entrenched. The combination of scale, credit rating, brand recognition, and 30-year track record creates a self-reinforcing flywheel that would take a competitor decades to replicate.

The right mental model for O is not a growth stock, not even a value stock. It's an income machine. And the right question is always: "At what price does this income machine offer me adequate compensation for the risks I'm taking?" Today, that answer is: "Not quite yet. But almost."

Executive Summary

3-Sentence Investment Thesis: Realty Income is the world's largest net-lease REIT, owning 15,500+ freestanding commercial properties leased to 1,600+ tenants under long-term triple-net leases with built-in rent escalators. The company's scale advantage, A-rated balance sheet, and 30+ year track record of monthly dividend payments create a bond-like income floor with equity upside through disciplined acquisitions at 7%+ cap rates. At $65.66 with a 4.93% yield and trading at 15.4x 2025E AFFO, the stock is fairly valued — not a screaming buy but a quality compounder worth accumulating on dips below $56.

Key Metrics Dashboard:

Metric	Value	Assessment
AFFO/Share (2024)	$4.19	14th consecutive year of growth
AFFO/Share (2025E)	$4.26	+1.7% YoY
AFFO/Share (2026E)	$4.42	+3.8% YoY
Dividend/Share (annualized)	$3.24	667+ consecutive monthly payments
AFFO Payout Ratio	75%	Safe for REIT; 25% retained
Occupancy	98.7%	Never below 96% since 1992
WALT	8.9 years	Long-duration cash flows
Net Debt/EBITDA	5.4x	Investment grade (A3/A-)
Properties	15,500+	Largest net-lease REIT globally
P/AFFO (2025E)	15.4x	In-line with historical average

Recommendation: WAIT — Accumulate below $56 (Strong Buy below $49)

Phase 0: Opportunity Identification (Klarman)

Why Does This Opportunity Exist?

Realty Income has been punished by the interest rate cycle. Net-lease REITs are bond proxies — when the 10-year Treasury rose from 1.5% (2021) to 4.5%+ (2023-2025), the "yield spread" compressed, making REITs less attractive relative to risk-free bonds. The stock declined from $75+ in early 2022 to the low $50s in late 2023.

Opportunity Source Assessment:

Source	Present?	Notes
Forced selling	Partially	Index rebalancing after Spirit merger dilution
Complexity/stigma	No	Very well understood company
Institutional constraints	No	S&P 500 component, highly liquid
Temporary operational problem	No	Operations remain excellent
Market overreaction to bad news	Yes	Rate sensitivity overblown
Neglect	No	Widely followed (20+ analysts)

Core thesis for mispricing: The market treats O as a bond proxy and prices it primarily on the 10Y spread. When rates normalize or decline, the stock will re-rate. Meanwhile, the company compounds AFFO at 3-5% annually and pays a 5% yield — a total return of 8-10% annually even without multiple expansion.

Key question: Is the market right that 5.4x leverage is too high in a sustained high-rate environment, or is O's A-rated balance sheet and 30-year track record sufficient to weather any rate regime?

Phase 1: Risk Analysis (Inversion Thinking)

"All I want to know is where I'm going to die, so I'll never go there." — Munger

How Could This Investment Lose 50%+ Permanently?

Sustained high interest rates (5%+ 10Y for a decade): Would compress equity value as REIT cost of capital remains elevated. O must issue equity to grow, and high rates = dilutive issuance.
Retail apocalypse 2.0: If 80% of the portfolio (retail) faces mass tenant bankruptcies from e-commerce shift, occupancy drops below 90%.
Credit event in tenant base: Top 20 tenants are only 37% of rent, but concentration in dollar stores (10%), convenience stores (10%), and drug stores (4%) creates sector-specific risk.

If I Were Short, My 3-Sentence Bear Case:

"Realty Income is a levered bet on falling interest rates disguised as a safe income stock. At 5.4x net debt/EBITDA and $28.7B in debt, the company must continuously access capital markets to grow, making it hostage to equity market valuations. The 'Monthly Dividend Company' narrative masks a low-growth, capital-intensive business earning mid-single-digit returns on equity."

Top Risk Register

Risk Event	P(Event)	Impact	Expected Loss	Monitoring
Sustained high rates (10Y > 5%) for 5+ years	25%	-30%	-7.5%	Fed funds rate, 10Y yield
Major tenant bankruptcies (3+ top-20)	10%	-25%	-2.5%	Tenant credit ratings, store closures
REIT sector de-rating (structural)	10%	-35%	-3.5%	REIT ETF flows, institutional allocations
Acquisition integration failures	10%	-15%	-1.5%	Same-store NOI, occupancy trends
European expansion losses	15%	-10%	-1.5%	European NOI margins, FX impact
Regulatory changes (REIT tax status)	5%	-40%	-2.0%	Congressional proposals
Total Expected Downside			-18.5%

Non-Additive Tail Risk:

A combination of sustained high rates + retail tenant bankruptcies + forced equity dilution could create a doom loop where O must issue shares at depressed prices to fund maturing debt, further diluting AFFO per share and compressing the stock price. This "REIT death spiral" scenario is low probability (<5%) but high impact (-50%+).

Inversion Answers:

What would make me sell immediately (non-price triggers)?

Net Debt/EBITDA exceeds 7.0x
Occupancy drops below 95% for 2+ consecutive quarters
AFFO per share declines YoY for 2+ consecutive years
CEO Sumit Roy departs without credible successor
Dividend cut

Can I state the bear case better than the bears? Yes — the bear case is fundamentally about cost of capital. If O can't issue equity above AFFO/share accretively, the growth engine stalls. At $65.66 and $4.26 AFFO, O trades at 15.4x — which means any acquisition below a 6.5% cap rate is dilutive on a P/AFFO basis. The company is deploying at 7%+ currently, so there's a comfortable spread, but it narrows if the stock price drops.

Phase 2: Financial Analysis

5-Year Financial Summary

Metric	2020	2021	2022	2023	2024	5Y CAGR
Revenue ($M)	1,647	2,082	3,337	4,079	5,271	26.2%
Net Income ($M)	395	359	869	872	862	16.9%
AFFO/Share	$3.39	$3.59	$3.92	$4.00	$4.19	5.4%
Dividend/Share	$2.80	$2.85	$2.97	$3.06	$3.13	2.8%
AFFO Payout Ratio	82.6%	79.4%	75.8%	76.5%	74.7%	Improving
Properties	6,592	11,136	12,237	13,458	15,621	24.0%
Occupancy	97.9%	98.5%	99.0%	98.6%	98.7%	Stable
WALT (years)	9.3	9.1	9.5	9.8	9.3	Stable

Note: Revenue and property count growth primarily driven by VEREIT (2021), Spirit Realty (Jan 2024), and organic acquisitions. AFFO/share is the more meaningful per-share compounding metric.

Balance Sheet Evolution

Metric	2020	2021	2022	2023	2024	Q3 2025
Total Assets ($B)	20.7	43.1	49.7	57.8	68.8	~70
Total Debt ($B)	9.0	16.0	18.6	22.1	26.7	28.7
Equity ($B)	11.0	25.1	28.8	33.1	39.1	~39
Cash ($M)	824	259	171	233	445	417
D/E Ratio	0.82	0.64	0.64	0.67	0.68	~0.74
Net Debt/EBITDA	~5.5	~5.3	~5.5	~5.5	5.4	5.4

Assessment: The balance sheet has expanded dramatically through acquisitions (VEREIT 2021, Spirit 2024) but leverage metrics have remained remarkably stable at 5.3-5.5x. The A3/A- credit rating is well-deserved. Debt maturity is well-laddered with no single year exceeding 15% of total debt.

AFFO (Owner Earnings) Valuation

For a REIT, AFFO is the closest equivalent to "Owner Earnings":

Current AFFO per share: $4.26 (2025E midpoint) Growth rate: 3-5% AFFO/share growth sustainable long-term

Conservative DCF (10-Year):

AFFO/share Year 1: $4.26
Growth Years 1-5: 3.5% (conservative; guided $4.42 for 2026 = 3.8%)
Growth Years 6-10: 2.5% (mature phase)
Terminal growth: 2.0%
Discount rate: 8.5% (REIT cost of equity in current rate environment)

Year	AFFO/Share	PV @ 8.5%
1	$4.41	$4.06
2	$4.56	$3.88
3	$4.72	$3.70
4	$4.89	$3.53
5	$5.06	$3.37
6	$5.19	$3.18
7	$5.32	$3.01
8	$5.45	$2.84
9	$5.59	$2.68
10	$5.73	$2.53
Terminal (2% growth, 8.5% discount)		$41.93
Total DCF Value		$74.71

Sensitivity Table (DCF Fair Value per Share):

Discount Rate \ Terminal Growth	1.5%	2.0%	2.5%
7.5%	$88.12	$97.53	$109.58
8.0%	$77.86	$84.92	$93.72
8.5%	$69.56	$74.71	$81.12
9.0%	$62.73	$66.60	$71.36
9.5%	$57.04	$59.96	$63.52

Valuation Trinity

Method	Value/Share	vs. Current ($65.66)	MOS
DCF (Conservative, 8.5%, 2% TG)	$74.71	-12.1% premium	-12%
DCF (Base, 8.0%, 2% TG)	$84.92	-22.7% premium	-23%
15x AFFO Multiple (2025E)	$63.90	+2.7% discount	3%
16x AFFO Multiple (2025E)	$68.16	-3.7% premium	-4%
14x AFFO Multiple (2026E)	$61.88	+5.8% discount	6%
Peer comparison (NNN at 13.5x)	$57.51	+12.4% discount	12%
Weighted Average IV	$70	-6.2% premium	-6%

Intrinsic Value Estimate: ~$70/share (range $62-$85 depending on rate assumptions)

At $65.66, the stock trades at ~6% below my base-case intrinsic value — insufficient margin of safety for a new position. However, it's a reasonable hold price for existing shareholders collecting the 4.93% yield.

Margin of Safety Calculation

Intrinsic Value (Weighted): $70.00
Current Price: $65.66
Margin of Safety: ($70 - $65.66) / $70 = 6.2%
Required MOS (no catalyst): 30%
Required MOS (with catalyst): 20%

Verdict: Insufficient margin of safety at current price. Need a pullback to $49 (30% MOS) for strong buy or $56 (20% MOS) for accumulation.

Phase 3: Moat Analysis

Moat Sources

Moat Source	Strength	Evidence	Duration
Scale/Cost Advantage	WIDE	Largest net-lease REIT ($69B assets); lowest cost of capital (A-/A3); can absorb deals too large for competitors	15+ years
Switching Costs	MODERATE	Long-term leases (8.9 yr WALT); tenants invest in property improvements; costly to relocate	10+ years
Network Effect	NARROW	More properties = more tenant relationships = more off-market deal flow = more properties	Growing
Brand/Reputation	MODERATE	"The Monthly Dividend Company" brand; 30+ year track record attracts income investors	15+ years

Moat Width Assessment: WIDE

Scale advantage is the dominant moat. Realty Income's size gives it three critical advantages:

Cost of capital: A3/A- credit rating means O borrows at lower rates than any competitor. A 50bp advantage on $27B of debt = $135M/year savings.
Deal size: O can absorb $1B+ portfolio acquisitions that NNN, STOR, or smaller peers cannot. The Spirit Realty merger ($9.3B) was only possible because of O's scale.
Diversification: 15,500+ properties across 92 industries and 1,600+ tenants means no single tenant failure is catastrophic. Top tenant (7-Eleven) is only 3.3% of rent.

Moat Durability Assessment

Threat	Severity (1-5)	Timeline	Mitigation
E-commerce eroding retail	3	5-10 years	Portfolio tilting toward e-commerce resistant (grocery, convenience, dollar stores, fitness)
Interest rate regime shift	3	Ongoing	Staggered debt maturities, fixed-rate debt, strong coverage ratios
New entrants / competition	2	5+ years	Scale moat is self-reinforcing; no new competitor can match O's size in <10 years
Customer power shift	2	10+ years	1,600+ tenants; no single tenant > 3.3%
Regulatory change (REIT status)	2	Unlikely	Politically difficult to change; broad bipartisan support for REIT structure

10-Year Moat Trajectory: STABLE to WIDENING

The GIC partnership (Jan 2026) is a significant moat-widening event — it creates a private capital channel that reduces dependence on equity markets for growth funding. This is exactly the kind of structural advantage that compounds over time.

Phase 4: Management & Decision Synthesis

Management Assessment

CEO: Sumit Roy (since Oct 2018, with company since 2011)

MBA from University of Chicago Booth (Finance & Economics)
Previously UBS Investment Bank (7 years)
Total comp 2024: $15.25M (93.4% stock-based — well aligned)
Direct ownership: 0.043% (~$22M) — modest but meaningful
Track record: Executed VEREIT merger (2021), Spirit merger (2024), European expansion, GIC partnership
Capital allocation: A-grade — maintained leverage discipline through massive growth

Capital Allocation Track Record:

Use of Capital	Assessment
Acquisitions (7%+ cap rates)	Excellent — accretive spread over cost of capital
Dividend growth (2.8% CAGR)	Conservative — payout ratio declining, sustainable
ATM equity issuance	Disciplined — only issues above NAV
Debt management	Excellent — well-laddered, mostly fixed rate
$2B buyback authorization (Feb 2025)	Smart signal — first-ever buyback program

Spirit Realty Integration Assessment

Closed Jan 23, 2024 at $9.3B enterprise value
All-stock deal (0.762 SRC = 1 O)
~$50M annual G&A synergies
2.5% AFFO per share accretion achieved
Integration appears seamless — no occupancy disruption, leverage maintained at 5.4x

GIC Partnership (Jan 2026) — Strategic Significance

This is a pivotal move. By partnering with Singapore's sovereign wealth fund:

O gains $1.5B+ of co-investment capital that doesn't dilute public shareholders
Entry into Mexico industrial market (first international expansion beyond Europe)
Private capital management fee income (new revenue stream)
Reduces dependence on ATM equity issuance

Expected Return Probability Tree

Scenario	Probability	3-Year Annual Return	Weighted
Bull (rates fall, re-rate to 18x)	20%	+18%	+3.6%
Base (stable rates, AFFO compounds)	50%	+9%	+4.5%
Bear (rates rise, spread compresses)	25%	+2%	+0.5%
Disaster (recession + tenant failures)	5%	-15%	-0.8%
Expected Annual Return	100%		+7.8%

Entry Price Targets

┌─────────────────────────────────────────────────────────────────┐
│                     INVESTMENT RECOMMENDATION                    │
├─────────────────────────────────────────────────────────────────┤
│ Company: Realty Income Corporation      Ticker: O                │
│ Current Price: $65.66    Date: February 15, 2026                │
├─────────────────────────────────────────────────────────────────┤
│ INTRINSIC VALUE ESTIMATE: $70 (range $62-$85)                   │
│ MARGIN OF SAFETY: 6.2% (insufficient)                           │
├─────────────────────────────────────────────────────────────────┤
│ RECOMMENDATION: WAIT                                             │
├─────────────────────────────────────────────────────────────────┤
│ STRONG BUY:    $49.00 (30% below IV, 6.6% yield)               │
│ ACCUMULATE:    $56.00 (20% below IV, 5.8% yield)               │
│ FAIR VALUE:    $70.00                                           │
│ TAKE PROFITS:  $84.00 (20% above IV)                           │
│ SELL:          $105.00 (50% above IV)                           │
├─────────────────────────────────────────────────────────────────┤
│ POSITION SIZE: 3-4% of portfolio (at accumulate price)          │
│ CATALYST: Rate cuts OR GIC JV earnings accretion                │
│ PRIMARY RISK: Sustained high interest rates                     │
│ SELL TRIGGER: Net Debt/EBITDA > 7x or occupancy < 95%          │
└─────────────────────────────────────────────────────────────────┘

Monitoring Metrics

Metric	Current	Warning	Action
Occupancy	98.7%	<97%	Review tenant health
Net Debt/EBITDA	5.4x	>6.5x	Reduce position
AFFO/Share Growth	+1.7%	Negative for 2 years	Review thesis
AFFO Payout Ratio	75%	>85%	Dividend at risk
10Y Treasury	~4.3%	>5.5%	Higher discount rate
Same-Store Rent Growth	1.3%	<0%	Pricing power eroding
Acquisition Cap Rate	7.5%	<6.0%	Overpaying for growth

Sell Triggers (Pre-Committed)

Sell When:

Net Debt/EBITDA exceeds 7.0x for 2+ quarters
Occupancy drops below 95% for 2+ quarters
AFFO per share declines YoY for 2 consecutive years
Dividend is cut
Price exceeds $105 (50% above IV)

Never Sell Because:

Stock drops on a rate hike announcement
Quarterly earnings miss by $0.01
"REIT bear case" articles appear on Seeking Alpha
Market-wide correction unrelated to fundamentals

Sources Used & Data Extracted

Primary Documents Downloaded

Document	Source	Local Path
10-K FY2024	SEC EDGAR	`data/10-K_FY2024_o-20241231.htm`
10-K FY2023	SEC EDGAR	`data/10-K_FY2023_o-20231231.htm`
10-K FY2022	SEC EDGAR	`data/10-K_FY2022_o-20221231.htm`
10-K FY2021	SEC EDGAR	`data/10-K_FY2021_o-20211231.htm`
10-K FY2020	SEC EDGAR	`data/10-K_FY2020_o-20201231.htm`
2024 Annual Report	realtyincome.com	`data/annual-report-2024.pdf`
Investor Presentation	realtyincome.com	`data/investor-presentation-2024.pdf`

Press Releases Analyzed

Release	URL
FY2024 Results	realtyincome.com/investors/press-releases/...three-months-and-year-ended-1
Q3 2025 Results	realtyincome.com/investors/press-releases/...nine-months-ended-3
Q2 2025 Results	realtyincome.com/investors/press-releases/...six-months-ended-3
FY2023 Results	realtyincome.com/investors/press-releases/...year-ended-0
FY2022 Results	prnewswire.com/...december-31-2022-301752274.html
Spirit Realty Merger	realtyincome.com/investors/press-releases/...spirit-realty-capital
GIC Partnership	realtyincome.com/investors/press-releases/...gic

Web Sources

Source	Data Extracted
stockanalysis.com/stocks/o	Revenue, earnings, balance sheet 2020-2024
realtyincome.com/our-portfolio	Top tenants, portfolio breakdown, geography
dividendmax.com	Annual dividend per share 2019-2025
simplywall.st	CEO compensation, insider ownership
SEC EDGAR (data.sec.gov)	XBRL facts, submissions metadata