DCF Studio

    O · NYQ · Real Estate

    Realty Income Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 12.44

    Market price

    USD 57.58

    Implied upside

    -78.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.00% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 46.44% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 12.44-78.4%
    Exit multiple
    USD 53.54-7.0%
    Market price
    USD 57.58

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 5.8bnUSD 6.1bnUSD 6.4bnUSD 6.7bnUSD 7.0bnUSD 7.3bnUSD 7.5bnUSD 7.8bnUSD 8.0bnUSD 8.2bn+4.0%
    EBITUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bn+4.0%
    NOPATUSD 2.3bnUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+4.0%
    Add depreciation & amortisationUSD 2.7bnUSD 2.8bnUSD 3.0bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bn+4.0%
    Less capital expenditureUSD -2.7bnUSD -2.9bnUSD -3.2bnUSD -3.4bnUSD -3.7bnUSD -3.9bnUSD -4.2bnUSD -4.4bnUSD -4.7bnUSD -4.9bn+7.0%
    Capex, % of revenue46.4%48.0%49.5%51.0%52.5%54.0%55.5%57.0%58.5%60.0%-
    Less increase in working capitalUSD 5.4mUSD 51.3mUSD 50.4mUSD 49.1mUSD 47.4mUSD 45.3mUSD 42.7mUSD 39.7mUSD 36.3mUSD 32.6m-22.2%
    Free cashflow to firmUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.4bnUSD 2.4bnUSD 2.4bnUSD 2.4bnUSD 2.3bnUSD 2.3bnUSD 2.2bn-0.6%
    Discount factor0.96520.89920.83770.78040.72710.67730.63100.58790.54770.5102-
    Present valueUSD 2.2bnUSD 2.2bnUSD 2.0bnUSD 1.9bnUSD 1.8bnUSD 1.6bnUSD 1.5bnUSD 1.4bnUSD 1.2bnUSD 1.1bn-
    Present Value Of The ForecastUSD 16.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.765Reported 0.649, pulled toward 1.0 (Blume)
    Cost of equity8.13%Risk-free + beta x equity risk premium
    Cost of debt6.27%Risk-free + 138bp, the spread for a BB+ rating at 2.3x interest cover. Book interest / average debt was lower, at 3.9%.
    Market capitalisationUSD 54.5bn65.0% of capital
    Total debtUSD 29.3bn35.0% of capital, book value as a proxy
    Tax rate6.4%Effective, capped at statutory
    WACC7.34%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 12.44

    58% of EV

    Forecast FCFF, final year
    USD 2.2bn
    Capex at depreciation, working capital in reinvestment
    USD 3.3bn
    Less reinvestment at g/ROIC (34.1% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 2.2bn
    ROIC (WACC floor)
    7.3%
    Terminal value, undiscounted
    USD 45.7bn
    Terminal value, discounted
    USD 23.3bn
    Enterprise value
    USD 40.2bn
    Less net debt
    USD 28.9bn
    Equity value
    USD 11.3bn

    Exit at 16.3x EBITDA

    Value per shareUSD 53.54

    78% of EV

    Terminal value, undiscounted
    USD 119.1bn
    Terminal value, discounted
    USD 60.8bn
    Enterprise value
    USD 77.7bn
    Less net debt
    USD 28.9bn
    Equity value
    USD 48.8bn

    Spread between methods: 125%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.34%30.8329.9529.0728.1827.30
    6.34%20.8420.1419.4418.7418.04
    7.34%13.5913.0112.4411.8711.30
    8.34%8.087.607.136.656.18
    9.34%3.763.362.962.562.15

    Outlined: this model. Green text: above today's price of 57.58. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year19.8%3.6%12.1%
    EBIT margin45.1%42.6%86.5%
    Discount rate-7.3%3.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.