Franco-Nevada (FNV) AI Stock Analysis

• Market Cap: $46.81B
• Dividend Yield: 0.85%
• Average Volume (3M): 301.11K
• Price to Earnings (P/E): 42.7
• Beta (1Y): 0.54
• Revenue Growth: 21.83%
• EPS Growth: N/A
• Country: CA
• Employees: 38
• Sector: Basic Materials
• Sector Strength: 55
• Industry: Gold
• EPS (TTM): 1.72
• Shares Outstanding: 192,648,280
• 10 Day Avg. Volume: 293,713
• 30 Day Avg. Volume: 301,113
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 32.18
• Enterprise Value/Gross Profit: 45.22
• Enterprise Value/Ebitda: 34.37
• 1Y Price Target: $270.21
• Price Target Upside: 9.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: ―

Franco-Nevada exhibits strong financial health with a robust balance sheet and solid profitability, critical strengths in the mining industry. Despite high valuation metrics, the company's strategic acquisitions and positive earnings guidance for 2025 provide a favorable outlook. The technical analysis indicates strong momentum, though caution is warranted due to overbought signals. Overall, the stock is positioned well for growth, but the high P/E ratio suggests a premium for investors.

Positive Factors

Cash Flow

Operating cash flow of $430M beat our estimate of $269M and consensus of $279M.

Earnings

Franco-Nevada reported a financials beat, with adjusted EBITDA and adjusted EPS coming in higher than consensus.

Sales Growth

Franco-Nevada expects higher gold equivalent ounce sales in the second half of the year from increased deliveries and initial sales from new systems.

Negative Factors

Net Debt Position

Franco-Nevada's net cash position significantly decreased due to acquisitions, resulting in a pro forma net debt position.

Price Objective

The net asset value-based price objective is reduced by 2% due to the large upfront payment.

Valuation

Franco-Nevada has a premium valuation compared to the precious metals royalty and streaming peer average, despite more modest growth.

Franco-Nevada Business Overview & Revenue Model

Company Description

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally. It operates in two segments, Mining and Energy. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and energy comprising oil, gas, and natural gas liquids. The company was founded in 1983 and is headquartered in Toronto, Canada.

How the Company Makes Money

Franco-Nevada makes money primarily through a royalty and streaming business model. In a royalty agreement, the company provides upfront capital to mining and energy companies in exchange for a percentage of the revenue or production generated from the projects. In streaming agreements, Franco-Nevada secures the right to purchase a portion of the production, typically precious metals, at a fixed, discounted price. These agreements allow Franco-Nevada to generate revenue based on the production output of its partner companies without bearing the operational risks of mining. Key revenue streams include royalties from gold and other precious metals, as well as streams from energy assets. The company's success is bolstered by strategic partnerships with mining and energy firms and the careful selection of high-quality, long-term assets that ensure a stable and growing income.

Franco-Nevada Financial Statement Overview

Summary

Franco-Nevada showcases a strong financial position with excellent profitability and a solid balance sheet. The company's minimal debt and high equity ratio underscore its financial soundness. Despite a dip in revenue and free cash flow growth, the firm remains well-positioned within the mining industry, thanks to its robust cash generation and efficient capital management.

Income Statement

Franco-Nevada has maintained strong profitability, evidenced by a high gross profit margin and net profit margin in the latest year. The company showed resilience with a substantial recovery in EBIT and EBITDA margins in 2024 compared to the previous year. Revenue growth was negative over the past two years, which is a concern but offset by strong profitability metrics.

Balance Sheet

The company has an exceptionally strong balance sheet with zero debt and a high equity ratio, indicating financial stability and low leverage. The return on equity is robust, reflecting effective use of shareholders' capital. Overall, the balance sheet demonstrates strength with minimal liabilities and substantial equity.

Cash Flow

While operating cash flow remains strong, free cash flow has declined, indicating higher capital expenditures. The operating cash flow to net income ratio is favorable, suggesting efficient cash generation relative to net income. However, the decrease in free cash flow growth rate is a potential area for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.33B	1.11B	1.22B	1.32B	1.30B	1.02B
Gross Profit	949.60M	759.30M	766.60M	852.60M	822.10M	620.40M
EBITDA	1.25B	989.30M	-91.00M	1.12B	1.09B	833.50M
Net Income	785.00M	552.10M	-466.40M	700.60M	733.70M	326.20M
Balance Sheet
Total Assets	7.02B	6.33B	5.99B	6.63B	6.21B	5.59B
Cash, Cash Equivalents and Short-Term Investments	160.30M	1.45B	1.42B	1.20B	539.30M	534.20M
Total Debt	0.00	0.00	0.00	6.00M	6.09M	4.40M
Total Liabilities	418.60M	333.80M	225.00M	209.20M	184.70M	149.10M
Stockholders Equity	6.60B	6.00B	5.77B	6.42B	6.03B	5.44B
Cash Flow
Free Cash Flow	-937.60M	421.50M	469.60M	858.00M	194.90M	491.30M
Operating Cash Flow	1.18B	829.50M	991.20M	999.50M	955.40M	803.90M
Investing Cash Flow	-2.20B	-537.30M	-541.10M	-145.50M	-765.00M	-309.00M
Financing Cash Flow	-256.00M	-240.40M	-230.10M	-189.00M	-180.20M	-91.80M

Franco-Nevada Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 247.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 247.38 is above the 20-day moving average (MA) of 232.03, above the 50-day MA of 226.73, and above the 200-day MA of 207.16, indicating a bullish trend. The MACD of 5.92 indicates Negative momentum. The RSI at 62.68 is Neutral, neither overbought nor oversold. The STOCH value of 69.34 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FNV	74 Outperform	$46.81B	42.67	12.61%	0.85%	21.83%	―
Sector *	59 Neutral	kr30.19B	0.27	-5.15%	3.51%	0.74%	-22.36%
AEM	―	$65.38B	22.09	13.92%	1.19%	―	―
B	56 Neutral	$41.51B	15.23	11.41%	1.67%	19.79%	-262.11%
WPM	―	$42.19B	53.71	10.60%	0.70%	―	―
SAND	―	$3.10B	90.75	2.41%	0.60%	―	―
OR	―	$5.77B	73.44	6.27%	0.64%	―	―

Franco-Nevada Corporate Events

Franco-Nevada Files Year-End Disclosure Documents for 2024

Franco-Nevada Corporation has filed its year-end disclosure documents, including the Annual Information Form, Consolidated Annual Financial Statements, and Management’s Discussion and Analysis for 2024, with Canadian and U.S. regulatory authorities. This filing reflects the company’s ongoing commitment to transparency and regulatory compliance, potentially reinforcing its strong market position and providing stakeholders with critical financial insights.

Franco-Nevada Achieves Strong Q4 2024 Results Amid Strategic Growth

Franco-Nevada reported strong fourth-quarter results for 2024, driven by elevated gold prices and strategic acquisitions. The company completed over $1.3 billion in acquisitions and commitments, enhancing its medium-term production profile. Despite challenges with Cobre Panama, Franco-Nevada remains debt-free and well-capitalized, with a strong deal pipeline and a commitment to increasing dividends for the 18th consecutive year. The company also maintains a sector-leading ESG rating, highlighting its commitment to responsible mining practices.

Franco-Nevada Announces Investor Day for March 2025

Franco-Nevada has announced it will host an Investor Day on March 25, 2025, both in person and virtually, providing an opportunity for investors and analysts to engage with the management team. This event underscores Franco-Nevada’s commitment to transparency and stakeholder engagement, potentially strengthening its market position and investor relations.