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Realty Income (NYSE: NYSE:O), a $52.32 billion market cap REIT with an impressive 32-year dividend payment history, priced a dual-tranche €1.3 billion Euro-denominated senior unsecured note offering on Thursday, according to Stifel, which reiterated its buy rating and $68.00 price target on the stock.
The offering consists of €650 million of 3.375% senior unsecured notes due 2031 and €650 million of 3.875% senior unsecured notes due 2035. The 2031 notes priced at an effective yield to maturity of 3.456%, while the 2035 notes priced at 3.930%.
On a blended basis, the €1.3 billion offering has an 8.0-year weighted-average tenor and a blended yield to maturity of 3.693%, Stifel noted in its analysis of the transaction.
Realty Income plans to use the net proceeds to repay its $500 million term loan maturing next week and a portion of the $2.2 billion outstanding under its credit facility and commercial paper program.
Stifel analyst Simon Yarmak commented that "the attractive notes will limit the dilution from the repayment," supporting the firm’s continued buy recommendation on the real estate investment trust.
In other recent news, Realty Income Corporation announced its Q1 2025 earnings, revealing a miss on earnings per share (EPS) expectations but exceeding revenue forecasts. The company reported an EPS of $0.28, falling short of the projected $0.35, while revenue reached $1.38 billion, surpassing the expected $1.27 billion. Additionally, Realty Income disclosed a liquidity position of $4.6 billion, which includes cash, unsettled equity sales, and available credit facilities. The company also announced the issuance of €1.3 billion in notes, with BNP PARIBAS and other financial institutions acting as underwriters. In terms of dividends, Realty Income increased its monthly cash dividend to $0.2690 per share, continuing its long history of dividend growth. Furthermore, the company amended its 2021 Incentive Award Plan for directors, aligning their interests with shareholders. Analyst firms, such as Citigroup (NYSE:C) and RBC Capital Markets, have shown interest in Realty Income’s strategic investments, particularly in Europe, which continue to be a focus for the company. These developments highlight Realty Income’s ongoing efforts to expand and maintain financial health amidst market conditions.
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