Realty Income: Attractive For Income Investors, But Mr. Market May Be Trying To Tell Us Something (Rating Downgrade)

Realty Income remains a solid income-focused REIT with a strong dividend history, but recent underperformance raises concerns about future growth and portfolio quality. AFFO growth is modest, guidance was raised, but investment spreads may be overstated due to cost of capital assumptions, potentially masking weaker accretion. Valuation is attractive compared to peers, offering stable income and potential upside if interest rates fall, but capital appreciation is less compelling.