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

Franco-Nevada (NYSE:FNV) (TSE:FNV) issued its quarterly earnings results on Tuesday. The basic materials company reported $2.38 EPS for the quarter, topping 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 Stock Performance

NYSE:FNV traded down $0.62 during mid-day trading on Tuesday, hitting $236.98. 1,198,629 shares of the company’s stock traded hands, compared to its average volume of 865,862. The company has a fifty day moving average of $248.77 and a 200 day moving average of $230.43. Franco-Nevada has a twelve month low of $152.89 and a twelve month high of $285.67. The company has a market capitalization of $45.70 billion, a P/E ratio of 41.14, a P/E/G ratio of 2.24 and a beta of 0.34.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the company. CIBC Bancorp USA Inc. acquired a new position in shares of Franco-Nevada in the third quarter valued at about $262,000. AQR Capital Management LLC acquired a new stake in shares of Franco-Nevada in the first quarter worth $241,000. Sherman Porfolios LLC acquired a new stake in shares of Franco-Nevada in the fourth quarter worth $237,000. Nebula Research & Development LLC acquired a new stake in shares of Franco-Nevada in the second quarter worth $236,000. Finally, Qtron Investments LLC acquired a new stake in shares of Franco-Nevada in the fourth quarter worth $228,000. 77.06% of the stock is owned by institutional investors and hedge funds.

Analyst Ratings Changes

A number of brokerages recently weighed in on FNV. Zacks Research lowered shares of Franco-Nevada from a “strong-buy” rating to a “hold” rating in a report on Tuesday, March 31st. Canaccord Genuity Group raised Franco-Nevada from a “hold” rating to a “buy” rating in a research report on Wednesday, April 29th. UBS Group restated a “buy” rating and issued a $310.00 price target on shares of Franco-Nevada in a report on Friday, January 30th. Wall Street Zen upgraded shares of Franco-Nevada from a “hold” rating to a “buy” rating in a report on Sunday, April 26th. Finally, Weiss Ratings raised Franco-Nevada from a “hold (c+)” rating to a “buy (b)” rating in a research report on Friday, March 20th. Eight equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, Franco-Nevada has a consensus rating of “Moderate Buy” and an average price target of $257.25.

About Franco-Nevada

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.