Analyst Lawson Winder from Bank of America Securities reiterated a Hold rating on Franco-Nevada (FNV – Research Report) and increased the price target to C$248.00 from C$208.00.
Lawson Winder has given his Hold rating due to a combination of factors related to Franco-Nevada’s strategic focus and market positioning. The company aims to be the leading gold stock by prioritizing net asset value (NAV) and cash flow per share over merely increasing gold equivalent ounce (GEO) volume. While this strategy ensures a well-diversified portfolio with reliable long-term exposure to precious metals, it results in more modest growth compared to its peers, which is a consideration in the Hold rating.
Another factor influencing the Hold rating is Franco-Nevada’s approach to acquiring new royalty and streaming assets. The company focuses on assets with long tenure and optionality, allowing for value capture through commodity cycles. Despite having a low cost of capital, which enables them to accept lower upfront returns, the company’s premium trading position relative to its peers and the modest growth outlook contribute to the neutral stance. Additionally, adjustments to earnings estimates and NAV further align the company’s valuation with market expectations, justifying the Hold recommendation.
According to TipRanks, Winder is a 4-star analyst with an average return of 3.9% and a 51.69% success rate. Winder covers the Basic Materials sector, focusing on stocks such as Franco-Nevada, Kinross Gold, and Nucor.
In another report released on March 13, RBC Capital also maintained a Hold rating on the stock with a $160.00 price target.