W. P. Carey Stock Slumped Nearly 11% in October: A Closer Look

W. P. Carey Inc. (NYSE: WPC), a leading net lease REIT, experienced a significant stock price decline of nearly 11% in October 2024. This article explores the factors contributing to this downturn and provides an in-depth analysis of the company's financial performance and strategic decisions.


W. P. Carey's stock price decline can be attributed to a combination of factors, including market sentiment, sector-wide trends, and the company's strategic decisions. The REIT sector, including W. P. Carey, faced headwinds as investors rotated out of defensive sectors like REITs and into cyclical sectors, anticipating a potential economic recovery. Additionally, concerns about rising interest rates and their impact on REITs' net asset values (NAVs) weighed on investor sentiment.


W. P. Carey's financial performance in Q3 2024 played a significant role in its stock price decline. The company reported a 10.6% decrease in AFFO per diluted share, primarily reflecting the impact of the NLOP Spin-Off and dispositions under the Office Sale Program. Additionally, the company recognized a mark-to-market loss of $43.6 million on its shares of Lineage. Despite these challenges, W. P. Carey's AFFO of $1.18 still beat analyst expectations of $1.15, and diluted earnings per share of $0.51 surpassed expectations of $0.49.

W. P. Carey's strategic plan to exit office assets, including the NLOP Spin-Off in November 2023 and dispositions under the Office Sale Program, significantly impacted its financial performance and stock price. The company reported a 10.6% decrease in net income attributable to W. P. Carey and a 10.6% decline in AFFO per diluted share in the 2024 third quarter, primarily due to these office asset disposals. The markdown on Lineage shares also contributed to the decline in net income.

Despite these challenges, W. P. Carey's CEO, Jason Fox, expressed confidence in the company's ability to reach or exceed its 2024 investment volume guidance and achieve AFFO growth in 2025. The company's investment volume remained strong, with $971.4 million completed year-to-date, including $167.0 million in Q3 and $230.8 million subsequent to quarter end. Furthermore, the company's capitalization remained robust, with the repayment of €500 million of 2.25% Senior Unsecured Notes due July 2024 and the amendment of its credit facility and term loans to incorporate a sustainability-linked feature.


Analysts maintain a "Hold" rating for W. P. Carey stock, with an average target price of $62.33, indicating a potential 11.61% increase from the current price of $55.85. This suggests that analysts believe the stock is likely to perform similarly to the overall market and may present an attractive entry point for long-term investors.

In conclusion, W. P. Carey's stock price decline in October 2024 was driven by a combination of market sentiment, sector-wide trends, and the company's strategic decisions. Despite the recent downturn, W. P. Carey's strong fundamentals, including a diversified portfolio and robust rental income growth, position the company for long-term success. Investors should consider the company's strategic positioning and potential for growth as they evaluate its investment prospects.