UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Realty Income

In a report published Friday, J.P. Morgan & Co. reiterated its Neutral rating on Realty Income

, and raised its price target from $35.00 to $38.00. J.P. Morgan noted, “Longer term, a strategic item to watch for O will be whether or not opening up the universe of potential triple net lease deals (this deal further brings net lease offices, warehouses, bigger retail boxes, or other corporate owned real estate into the spectrum of acquisition opportunities) compared to its historical small freestanding retail box focus outweighs the ‘law of large numbers' in driving growth through acquisitions. Interestingly on the conference call, O's management noted that it is seeing a number of large deals these days, suggesting that even with a much larger enterprise, it has significant growth potential. In addition, O's low capital costs will need to be sustained. Management cited size a number of times as helping on this front. We agree with that idea on the debt capital front, but it is less clear to us how true that will hold on the equity side.” Realty Income closed on Thursday at $42.21.