Yahoo Finance Why Is Franco-Nevada (FNV) Up 14.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Franco-Nevada (FNV). Shares have added about 14.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Franco-Nevada due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Franco-Nevada Q4 Earnings Top Estimates, Revenues Dip Y/Y
Franco-Nevad reported adjusted earnings of 86 cents per share in fourth-quarter 2022, in line with the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 85 cents.
The company generated revenues of $320 million in the reported quarter, marking a year-over-year decline of 2.4%. The downside was mainly driven by lower contributions from Precious Metal and Iron Ore assets, offset by the company’s Energy assets due to higher realized oil and gas prices. During the December-end quarter, 70.7% of revenues were sourced from Precious Metal assets (55.6% gold, 10.2% silver and 4.9% platinum group metals).
The company sold 129,642 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down 6.6% from the prior-year quarter. FNV sold 183,886 GEOs (including Energy), up 1% from the prior-year quarter.
In the reported quarter, adjusted EBITDA was down 2.7% year over year to $262.4 million.
Financial Position
The company had $1,196.5 million cash in hand at the end of 2022, up from $539.3 million as of the end of 2021. It recorded an operating cash flow of $999.5 million in 2022, up from the $955.4 million witnessed in 2021.
Franco-Nevada is debt-free and uses its free cash flow to expand the portfolio and payout dividends. FNV now has available capital of $2.2 billion.
2022 Results
Franco-Nevada reported record adjusted EPS of $3.64 in 2022 compared with $3.52 in the prior year. Yearly earnings beat the Zacks Consensus Estimate of $3.63.
Sales were up 1.2% year over year to a record $1.32 billion. Revenues were in line with the Zacks Consensus Estimate.
Guidance
Franco-Nevada expects total GEOs between 640,000 and 700,000 in 2023, a decrease from that reported in 2022. Of this, GEOs from precious metal assets are expected between 490,000 and 530,000 GEOs, in line with the 2022 guidance. The outlook reflects an expected lower oil and gas prices.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted 8.13% due to these changes.
VGM Scores
Currently, Franco-Nevada has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Franco-Nevada has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
