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Franco-Nevada (FNV) Gains From Solid Portfolio & Metal Prices

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Franco-Nevada (FNV - Free Report) has been gaining from its healthy portfolio of royalty and streaming agreements, and contributions from the recent buyouts. The company is well-poised to deliver strong earnings growth, aided by a focus on mine expansions and strong production from the Antamina mine.

Even though the company anticipates lower-than-estimated mining activities at Guadalupe, and decreased stream deliveries at Antamina and Antapaccay mines due to lower grades in the current year, these are likely to be offset by expected savings from its continued focus on cost management. The recent pickup in metal prices also bodes well for the company.

Shares of this Zacks Rank #1 (Strong Buy) company have gained 15.1% in the past year compared with the industry’s growth of 15.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.


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Franco-Nevada appears to be on a promising long-term trajectory, backed by a healthy portfolio of streaming and royalty agreements put in place years ago. One of the inherent strengths of its business model is the diversified portfolio of precious metals, energy and iron ore. The company expects higher gold and silver stream deliveries from Candelaria, Antamina and Cobre Panama mines for the current year. It has been adding to its portfolio without accumulating significant overhead. Given its continued focus on cost management, Franco-Nevada continues to generate high margins

The uncertainty around global economic growth has fueled gold and silver prices in 2023. Currently, the gold price is around $1,989 per ounce, and the silver price is around $23 per ounce. This pickup in the prices of gold and silver is likely to improve Franco-Nevada’s results in the upcoming quarters.

Franco-Nevada is debt-free, and uses its free cash flow to expand its portfolio and pay dividends. It had available capital of $2.2 billion as of Mar 31, 2023. The company had $1,248 million cash in hand at the end of the first quarter of 2023, up from $723 million reported at the end of first-quarter 2022.

Other Stocks to Consider

Some other top-ranked stocks in the basic materials space are AngloGold Ashanti (AU - Free Report) , Gold Fields Limited (GFI - Free Report) , and Alamos Gold Inc. (AGI - Free Report) . AU currently flaunts a Zacks Rank #1, and GFI and AGI carry a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for AngloGold Ashanti’s earnings per share is pegged at $1.94 for 2023. Earnings estimates have been revised 22% upward in the past 60 days. The company has gained 45% in a year.

The Zacks Consensus Estimate for Gold Fields’ fiscal 2023 earnings per share is pegged at $1.01. Earnings estimates have moved 6.3% north in the past 60 days. Its shares have gained 46.2% in the past year.

The Zacks Consensus Estimate for Alamos Gold’s earnings per share is pegged at 47 cents for 2023. Earnings estimates have been revised 14.6% upward in the past 60 days. AGI has gained 84.5% in a year.

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