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    Realty Income’s US$750 Million Convertible Notes And Buyback Might Change The Case For Investing In O

    Simply Wall St·01/07/2026 08:36:36
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    • In early January 2026, Realty Income Corporation completed a US$750,000,000 private Rule 144A offering of 3.500% senior unsecured, callable and convertible notes due January 15, 2029, priced at 100% of principal.
    • The transaction not only adds flexible, unsecured capital for debt repayment and property growth but also includes a concurrent repurchase of about 1.8 million shares, reflecting management’s willingness to balance funding needs with equity dilution.
    • We’ll now examine how this US$750,000,000 convertible notes issuance and share repurchase plan could reshape Realty Income’s existing investment narrative.

    Find companies with promising cash flow potential yet trading below their fair value.

    Realty Income Investment Narrative Recap

    To own Realty Income, you need to believe its necessity-based, net lease model and long leases can keep supporting steady income despite rate and retail headwinds. The new US$750,000,000 3.500% convertible notes add flexibility for refinancing and growth, but do not fundamentally change the key near term catalyst of funding costs or the main risk from potentially higher interest expenses.

    The most relevant recent announcement here is Realty Income’s plan to use a portion of the notes’ proceeds to repurchase about 1.8 million shares. That pairing of new unsecured, convertible debt with a concurrent buyback sits directly against the current focus on acquisition economics, cost of capital and how much room Realty Income has to pursue European expansion without stretching its balance sheet.

    But investors should also be aware that rising funding costs could still...

    Read the full narrative on Realty Income (it's free!)

    Realty Income's narrative projects $6.2 billion in revenue and $1.6 billion in earnings by 2028. This requires 4.1% yearly revenue growth and about a $700 million earnings increase from $908.1 million today.

    Uncover how Realty Income's forecasts yield a $63.35 fair value, a 10% upside to its current price.

    Exploring Other Perspectives

    O 1-Year Stock Price Chart
    O 1-Year Stock Price Chart

    Eighteen members of the Simply Wall St Community see Realty Income’s fair value anywhere between US$55 and about US$96 per share. Against that wide dispersion, the shared concern about interest rate driven funding costs and acquisition economics gives you a very different lens on how those valuations might play out over time.

    Explore 18 other fair value estimates on Realty Income - why the stock might be worth as much as 67% more than the current price!

    Build Your Own Realty Income Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.