Is Realty Income Corp. overvalued or undervalued?

As of 23 May 2025, the valuation grade for Realty Income Corp. moved from fair to very attractive, indicating a shift towards a more favorable assessment. The company appears to be undervalued, particularly when considering its P/E ratio of 36, which is lower than the peer average of 39.28, and its EV to EBITDA ratio of 10.36, which also compares favorably against peers like Welltower, Inc. with an EV to EBITDA of 30.74. Additionally, the PEG ratio stands at 1.12, suggesting reasonable growth expectations relative to its valuation.
In comparison to its peers, Realty Income Corp. is positioned well, especially against Simon Property Group, Inc., which has a P/E of 33.41 and is also rated very attractive. Despite the positive valuation metrics, the company's recent stock performance has lagged behind the S&P 500, with a 1-year return of -4.95% compared to the S&P 500's 17.14%. This underperformance over the past year, along with longer-term returns, reinforces the notion that Realty Income Corp. may be undervalued relative to its potential.