Realty Income Stock Awaits Catalyst as Rate Cut Expectations Build

Realty Income (O 1.09%), a stalwart in single-tenant net-leased properties, may finally see its fortunes reverse after years of underperformance. The stock remains depressed compared to pre-pandemic levels despite the company's decades-long growth and expansive portfolio.

Market participants now eye September as a potential inflection point. Rates futures indicate a 95% probability of a Federal Reserve cut, with some analysts like Treasury Secretary Scott Bessent predicting an aggressive 50-basis-point reduction. Such monetary easing could unlock value for capital-intensive REITs.

The July CPI print at 0.2% monthly (2.7% annualized) reinforced dovish expectations. Realty Income's share price trajectory appears increasingly tethered to interest rate dynamics, with the February 2020 peak serving as a reminder of its sensitivity to financing conditions.