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

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

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 Stock Performance

Shares of FNV traded down $0.62 during midday trading on Tuesday, hitting $236.98. 1,198,629 shares of the company traded hands, compared to its average volume of 865,862. The stock has a market cap of $45.70 billion, a price-to-earnings ratio of 41.14, a PEG ratio of 2.24 and a beta of 0.34. The firm has a 50 day moving average of $248.77 and a 200-day moving average of $230.43. Franco-Nevada has a 52 week low of $152.89 and a 52 week high of $285.67.

Hedge Funds Weigh In On Franco-Nevada

Several institutional investors have recently added to or reduced their stakes in the company. Nebula Research & Development LLC purchased a new position in Franco-Nevada in the second quarter worth about $236,000. Qtron Investments LLC bought a new stake in Franco-Nevada in the fourth quarter worth about $228,000. DRW Securities LLC bought a new stake in Franco-Nevada in the fourth quarter worth about $221,000. Equitable Holdings Inc. bought a new stake in Franco-Nevada in the third quarter worth about $211,000. Finally, Brown Brothers Harriman & Co. lifted its stake in Franco-Nevada by 10.7% in the fourth quarter. Brown Brothers Harriman & Co. now owns 971 shares of the basic materials company’s stock worth $201,000 after purchasing an additional 94 shares during the last quarter. Hedge funds and other institutional investors own 77.06% of the company’s stock.

Wall Street Analysts Forecast Growth

FNV has been the topic of several recent research reports. HC Wainwright raised their price objective on Franco-Nevada from $285.00 to $305.00 and gave the stock a “buy” rating in a research note on Thursday, March 12th. Scotiabank boosted their price objective on Franco-Nevada from $283.00 to $286.00 and gave the company a “sector perform” rating in a research note on Monday, March 16th. Canadian Imperial Bank of Commerce reissued an “outperform” rating on shares of Franco-Nevada in a report on Wednesday, February 4th. Wall Street Zen upgraded shares of Franco-Nevada from a “hold” rating to a “buy” rating in a research note on Sunday, April 26th. Finally, Zacks Research cut shares of Franco-Nevada from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, March 31st. Eight investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. According to MarketBeat, Franco-Nevada currently has an average rating of “Moderate Buy” and an average 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.