Buying an iconic REIT following a down year in which the shares declined 7% (or 2% on a dividend-adjusted basis) might seem opportunistic, given its long-term track record of market outperformance. Unfortunately, analysts who follow the company aren't hearing the same dinner bell. At least four Wall Street pros have slashed their price targets on Realty Income this month alone.

The consensus among the analysts seems to be that 2025 could be a challenging operating and interest rate environment for Realty Income. It's important to remember that while shifting the expense burden of triple net leases to its tenants makes it easier on Realty Income, it does make it that more unpredictable for the businesses. Realty Income currently has an impressive 98.7% portfolio occupancy rate, but that can change quickly if the economy stumbles or operating costs spiral out of control.

Hold Realty Income

Slow and steady is the name of the game at Realty Income. Adjusted funds from operation rose a mere 6% in its latest quarter. At the end of the third quarter, Realty Income was targeting a 5% increase in adjusted funds from operations in 2025.

Investors will receive a lot more clarity next month when the REIT announces its fourth-quarter results. Will it stick to its earlier guidance, or does it see some of the same warning signs that led to a couple of analysts lowering their projections earlier this month?

The dividend streak is impressive, but the hikes have been typically fractional pennies. Despite four quarterly increases over the past year, the payout is just 2.9% higher than it was a year ago.

Stability naturally isn't a bad thing. Realty Income estimates that about 90% of its collected rent is generated from business that are either recession resistant or free of e-commerce disruption. Despite the wild swings of interest rates and operating climates over time, Realty Income has been able to come through with bottom-line growth in 27 of the past 28 years.

What's the verdict?

So is Realty Income a buy, sell, or hold? I'm going with the bulls here. The declining stock over the past year has boosted Realty Income's yield to 5.8%. Yields of the leading money market funds that were roughly even with the REIT a year ago are much lower now. Next month's financial update will be critical in assessing the challenges starting to percolate in 2025, but it's hard to bet against a track record of nearly three years of stability.