Franco-Nevada (NYSE:FNV) Releases Quarterly Earnings Results, Beats Expectations By $0.29 EPS

Franco-Nevada (NYSE:FNV) (TSE:FNV) announced its earnings results on Tuesday. The basic materials company reported $2.38 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.09 by $0.29, Zacks reports. Franco-Nevada had a net margin of 61.01% and a return on equity of 15.62%.

Here are the key takeaways from Franco-Nevada’s conference call:

• The shareholders approved all formal items, including the election of nine directors, appointment of PwC as auditor, and the say-on-pay advisory resolution, with preliminary results showing strong support in the high 90s.
• Management reiterated Franco-Nevada’s long-term track record of profitable growth, citing 18 years as a public company with roughly 12x revenue growth, 14x EBITDA cash flow growth, and 19 consecutive annual dividend increases.
• The company highlighted a strong five-year growth outlook through 2030, projecting 40%–50% portfolio growth assuming Cobre Panama returns, with additional long-term optionality that could add about 220,000 GEOs of annual production.
• Executives emphasized the value of the asset base, saying the gold inventory they can currently see is worth about $124 billion at today’s gold prices versus a market cap/enterprise value around $44 billion, suggesting substantial embedded upside.
• Management pointed to several large optionality-driven projects as underappreciated assets, including Ring of Fire and New Prosperity, and said the company remains open to more energy deals because oil royalties have performed well and provide diversification.

Franco-Nevada Trading Down 0.3%

FNV traded down $0.62 during mid-day trading on Tuesday, hitting $236.98. 1,198,629 shares of the stock were exchanged, compared to its average volume of 865,862. The firm’s fifty day moving average is $248.77 and its two-hundred day moving average is $230.43. Franco-Nevada has a 1-year low of $152.89 and a 1-year high of $285.67. The company has a market cap of $45.70 billion, a PE ratio of 41.14, a PEG ratio of 2.24 and a beta of 0.34.

Institutional Investors Weigh In On Franco-Nevada

Hedge funds have recently added to or reduced their stakes in the business. Transamerica Financial Advisors LLC acquired a new stake in Franco-Nevada during the 4th quarter worth approximately $25,000. Quattro Advisors LLC acquired a new stake in Franco-Nevada during the 4th quarter worth approximately $36,000. Smartleaf Asset Management LLC lifted its holdings in Franco-Nevada by 600.0% during the 2nd quarter. Smartleaf Asset Management LLC now owns 196 shares of the basic materials company’s stock worth $32,000 after buying an additional 168 shares in the last quarter. Intesa Sanpaolo Wealth Management acquired a new stake in Franco-Nevada during the 4th quarter worth approximately $51,000. Finally, J.Safra Asset Management Corp acquired a new stake in Franco-Nevada during the 4th quarter worth approximately $65,000. 77.06% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

FNV has been the topic of a number of research analyst reports. HC Wainwright lifted their price target on Franco-Nevada from $285.00 to $305.00 and gave the stock a “buy” rating in a research note on Thursday, March 12th. Canaccord Genuity Group raised shares of Franco-Nevada from a “hold” rating to a “buy” rating in a research note on Wednesday, April 29th. Weiss Ratings raised shares of Franco-Nevada from a “hold (c+)” rating to a “buy (b)” rating in a research note on Friday, March 20th. Wall Street Zen raised shares of Franco-Nevada from a “hold” rating to a “buy” rating in a research note on Sunday, April 26th. Finally, Scotiabank upped their price objective on shares of Franco-Nevada from $283.00 to $286.00 and gave the company a “sector perform” rating in a research note on Monday, March 16th. Eight equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $257.25.

Franco-Nevada Company Profile

Franco-Nevada Corporation is a Toronto-based royalty and streaming company that specializes in securing and managing long-term interests in mining properties. The firm focuses primarily on precious metals, particularly gold, while also holding interests related to silver, copper, platinum-group metals and select base metals. Rather than operating mines directly, Franco-Nevada acquires royalty and streaming agreements that entitle it to a percentage of production or revenue from producing and developing assets in exchange for upfront or staged financing.

The company’s business model centers on providing capital to mining companies in return for a sustained share of production or metal revenue, which can reduce exposure to operating and capital cost risks typical of mine operators.