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Franco-Nevada (TSE:FNV)
TSX:FNV
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Franco-Nevada
(TSX:FNV)
67Neutral
Positive Factors
Asset Diversification
Franco-Nevada is well-diversified with reliable long-term exposure to precious metals.
Financial Performance
Franco-Nevada reported Q4’24 financial results with adjusted EBITDA and adjusted EPS better than consensus.
Negative Factors
Revenue Performance
Franco-Nevada recorded $275.7M in revenue that yielded net income of $152.7M, which came in below the previous year's revenue and net income.
Franco-Nevada (FNV) vs. S&P 500 (SPY)
Market Cap
$40.46B
Dividend Yield0.99%
Average Volume (3M)309.24K
Price to Earnings (P/E)53.4
Beta (1Y)0.47
Revenue Growth-10.48%
EPS Growth-189.87%
CountryCA
Employees40
SectorBasic Materials
Sector Strength64
IndustryMining
Share Statistics
EPS (TTM)3.94
Shares Outstanding192,552,690
10 Day Avg. Volume439,236
30 Day Avg. Volume309,240
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)25.85
Price to Cash Flow (P/CF)33.10
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$222.60Price Target Upside5.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Franco-Nevada Business Overview & Revenue Model
Company DescriptionFranco-Nevada Corporation (FNV) is a leading gold-focused royalty and streaming company with a diversified portfolio of assets in the mining sector. The company holds interests in gold, silver, platinum group metals, and other resource projects, providing investors with exposure to commodity price fluctuations without the operational risks associated with mining. Franco-Nevada is headquartered in Toronto, Canada, and operates globally, leveraging its expertise to manage a portfolio of royalties and streams over producing and development stage assets.
How the Company Makes MoneyFranco-Nevada makes money primarily through a royalty and streaming business model. Royalties involve the company receiving a percentage of the revenue or production from a mine, while streaming agreements allow Franco-Nevada to purchase a portion of the production at a predetermined price. These models provide Franco-Nevada with a consistent cash flow and exposure to commodity prices without the need for direct investment in mining operations. The company's revenue streams are diversified across numerous projects and commodities, reducing risk and enhancing financial stability. Significant partnerships with mining operators and strategic acquisitions further contribute to its revenue growth, enabling Franco-Nevada to maintain a robust financial performance.
Franco-Nevada Financial Statement Overview
Summary
Franco-Nevada exhibits a solid financial foundation with a strong balance sheet and positive cash flows, which are crucial for a mining company. However, declining revenues and negative margins present challenges that need addressing to enhance profitability and sustain growth.Income Statement
Franco-Nevada's income statement shows mixed performance. The TTM (Trailing-Twelve-Months) revenue has declined from the previous year, indicating a revenue contraction. The gross profit margin is relatively strong at 70.6%, but the net profit margin is negative due to a significant net loss, which raises concerns about profitability. The EBITDA margin is also negative, highlighting operational challenges.45
Neutral
Balance Sheet
Franco-Nevada's balance sheet is robust, with a strong equity position. The equity ratio is high at 95.0%, reflecting financial stability and low leverage, as the company has no debt. This financial structure provides a buffer against operational fluctuations.80
Positive
Cash Flow
The cash flow statements show a mixed picture. Despite the negative net income, the company generates positive operating cash flow and free cash flow. However, free cash flow has decreased compared to the previous year, indicating a decline in cash generation efficiency.60
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.10B | 1.22B | 1.32B | 1.30B | 1.02B | 844.10M | Gross Profit |
| 776.70M | 766.60M | 852.60M | 822.10M | 620.40M | 436.10M | EBIT |
| 695.80M | -428.00M | 820.70M | 860.70M | 592.50M | 410.20M | EBITDA |
| -208.80M | -91.00M | 1.11B | 1.16B | 833.50M | 673.40M | Net Income Common Stockholders |
| -632.95M | -466.40M | 700.60M | 733.70M | 326.20M | 344.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 69.70M | 1.42B | 1.20B | 539.30M | 534.20M | 132.10M | Total Assets |
| 4.93B | 5.99B | 6.63B | 6.21B | 5.59B | 5.28B | Total Debt |
| 207.60M | 0.00 | 6.00M | 6.09M | 4.40M | 82.60M | Net Debt |
| 137.90M | -1.42B | -1.19B | -533.21M | -529.80M | -49.50M | Total Liabilities |
| 299.90M | 225.00M | 209.20M | 184.70M | 149.10M | 218.40M | Stockholders Equity |
| 4.63B | 5.77B | 6.42B | 6.03B | 5.44B | 5.06B |
| Cash Flow | Free Cash Flow | ||||
| 386.28M | 469.60M | 858.00M | 194.90M | 491.30M | 172.50M | Operating Cash Flow |
| 875.89M | 991.20M | 999.50M | 955.40M | 803.90M | 617.70M | Investing Cash Flow |
| -612.38M | -541.10M | -145.50M | -765.00M | -309.00M | -436.10M | Financing Cash Flow |
| -237.94M | -230.10M | -189.00M | -180.20M | -91.80M | -119.80M |
Franco-Nevada Technical Analysis
Positive
211.70
Price Trends
193.98
Positive
183.92
Positive
175.33
Positive
Market Momentum
4.22
Negative
66.22
Neutral
74.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FNV, the sentiment is Positive. The current price of 211.7 is above the 20-day moving average (MA) of 203.56, above the 50-day MA of 193.98, and above the 200-day MA of 175.33, indicating a bullish trend. The MACD of 4.22 indicates Negative momentum. The RSI at 66.22 is Neutral, neither overbought nor oversold. The STOCH value of 74.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FNV.
Franco-Nevada Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $10.03B | 17.11 | 39.23% | 2.09% | 34.41% | 139.62% | |
75 Outperform | $46.50B | 56.05 | 8.64% | 0.87% | 30.91% | 14.58% | |
70 Outperform | $2.65B | 136.17 | 1.00% | 0.93% | 0.80% | 137.87% | |
67 Neutral | $40.46B | 53.44 | 9.38% | 0.99% | -10.48% | -189.87% | |
56 Neutral | $5.13B | 229.60 | 1.33% | 0.98% | 1.62% | -232.31% | |
47 Neutral | $2.63B | -3.97 | -29.27% | 3.34% | 2.54% | -29.42% |
* Basic Materials Sector Average
Performance Comparison
TSE:FNV
Franco-Nevada
216.66
63.57
41.52%
TSE:SSL
Sandstorm Gold
9.30
2.76
42.14%
TSE:LUG
Lundin Gold
43.47
26.85
161.58%
TSE:OR
Osisko Gold Royalties
28.02
6.77
31.88%
TSE:WPM
Wheaton Precious Metals
105.02
44.75
74.26%
Franco-Nevada Earnings Call Summary
Earnings Call Date: Mar 10, 2025 | % Change Since: 3.15% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance in 2024 with significant acquisitions and record gold prices contributing to positive results. However, challenges such as the absence of Cobre Panama's contribution, volatile commodity prices, and future declines in certain assets posed concerns. The overall sentiment is balanced with a slight positive tilt due to the strong financial outcomes and strategic acquisitions.Highlights
Strong Fourth Quarter and Year-End Results
Franco-Nevada ended the year with a strong fourth quarter, surpassing revenue and adjusted EBITDA from Q4 2023. The company achieved top-end GEO sales within their revised guidance range and benefited from high gold prices.
Successful Acquisitions and Business Development
In 2024, Franco-Nevada made over $1.3 billion in acquisitions, including investments in Cascabel, Yanacocha, and Sibanye’s Western Limb PGM operations. These additions have the potential to add 85,000 to 95,000 GEOs annually.
Record Gold and Silver Prices
Gold prices increased by 34.7% in Q4 and 22.9% for the year. Silver prices also saw significant increases, contributing to higher revenue.
Increased Dividends
Franco-Nevada increased dividends for the 18th consecutive time in January 2025, with cumulative dividends since IPO exceeding $2.5 billion.
Lowlights
Loss of Cobre Panama Contribution
The absence of contribution from Cobre Panama impacted GEO sales and revenue, resulting in a decrease in cost of sales and depletion.
Volatile Commodity Prices
Prices for palladium, iron ore, and oil were volatile and lower year-over-year, impacting the diversified assets' contribution to GEO sales.
Legal and Arbitration Costs
Expected annual costs of approximately $10 million related to legal proceedings concerning Cobre Panama.
Future Decline in Production from Some Assets
Projected decline in GEOs from Guadalupe, Palmarejo by 2029, and loss of gold ounces from Mine Waste Solutions as the cap was reached in October 2024.
Company Guidance
In the recent conference call, Franco-Nevada provided several key metrics regarding their 2024 performance and 2025 guidance. The company reported 463,334 gold equivalent ounces (GEOs) sold for 2024, achieving the top end of their revised guidance range of 445,000 to 465,000 GEOs. Revenue for Q4 2024 increased by 5.8% year-over-year to $321 million, with adjusted EBITDA rising by 9% to $277.4 million. Notably, the company executed over $1.3 billion in acquisitions and commitments, including significant investments in gold stream and royalty agreements. For 2025, Franco-Nevada is guiding total GEO sales between 465,000 to 525,000, representing a 7% increase over 2024, using a gold price assumption of $2,800 per ounce. The company also highlighted that its cash costs per GEO decreased to $278 in 2024 from $286 in 2023, maintaining strong margins. Additionally, Franco-Nevada emphasized its robust financial position, with total available capital of $2.4 billion, including a $1 billion credit facility, and announced an 18th consecutive annual dividend increase.Franco-Nevada Corporate Events
DividendsFinancial Disclosures
Franco-Nevada Increases Dividend and Prepares Year-End Results Release
Positive
Jan 29, 2025
Franco-Nevada Corporation has announced an increase in its quarterly dividend to US$0.38 per share, marking an 18th consecutive annual increase, which reflects its ongoing commitment to shareholder returns. The company also detailed the release schedule for its year-end 2024 results, and provided information about its Dividend Reinvestment Plan, which offers shareholders the opportunity to purchase additional shares at a discount, further enhancing shareholder value.
Private Placements and FinancingBusiness Operations and Strategy
Franco-Nevada Bolsters Gold Portfolio with Discovery Silver Partnership
Positive
Jan 27, 2025
Franco-Nevada announced a financing package with Discovery Silver Corporation to aid in the acquisition of the Porcupine Complex from Newmont Corporation. This transaction includes a net smelter return royalty, a senior secured term loan, and equity participation, which will help Discovery Silver acquire and enhance the Porcupine Complex’s production capabilities. The Porcupine Complex, with a rich history of gold production and extensive infrastructure, presents a significant opportunity for both companies. The collaboration is expected to revitalize the mining operations, offering substantial exploration potential and value creation for stakeholders, as well as reinforcing Franco-Nevada’s leading position in royalty coverage of major gold mines in Ontario.
Daniel Malchuk Joins Franco-Nevada Board, Bolstering Leadership
Jan 8, 2025
Franco-Nevada has announced the appointment of Daniel Malchuk to its board of directors, adding significant expertise to its leadership team. With over 30 years of experience in the natural resource industry, Malchuk’s extensive background with companies like BHP Group Ltd. is expected to strengthen Franco-Nevada’s strategic direction, potentially enhancing its industry positioning and benefiting stakeholders through informed decision-making and leadership.
Franco-Nevada Secures Major Metals Stream Deal
Dec 19, 2024
Franco-Nevada has entered into a $500 million precious metals stream agreement with Sibanye-Stillwater, focusing on gold and platinum production from South Africa’s Bushveld Complex. This deal promises immediate cash flow and long-term growth potential, leveraging extensive resources and infrastructure in a stable mining jurisdiction.
Franco-Nevada’s Q3 Results Show Resilience and Growth
Nov 6, 2024
Franco-Nevada reported solid Q3 2024 financial results, driven by record gold prices and contributions from new mines in Brazil and Canada. Despite a decrease in some metrics due to the Cobre Panama situation, the company remains financially robust with no debt and substantial available capital. Franco-Nevada’s diverse portfolio and strong pipeline position it well for future growth.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.