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Why Is Franco-Nevada (FNV) Up 10% Since Last Earnings Report?
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A month has gone by since the last earnings report for Franco-Nevada (FNV - Free Report) . Shares have added about 10% 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 drivers.
Franco-Nevada Q4 Earnings Top Estimates, Sales Fall Y/Y
Franco-Nevada reported adjusted earnings per share (EPS) of 90 cents for the fourth quarter of 2023, up 5% from the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 80 cents.
The company generated revenues of $303 million in the reported quarter, marking a year-over-year decline of 5.3%. The downside was due to lower gas, platinum group metals and oil prices, partly offset by higher gold prices. During the December quarter, 78.7% of revenues were sourced from Precious Metal assets (65.5% gold, 10.3% silver and 2.9% platinum group metals).
The company sold 119,581 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down 7.8% from the prior-year quarter. The downside was due to lower deliveries from Cobre Panama, Candelaria and Stillwater, partially offset by higher contributions from Antapaccay, MWS and Hemlo.
In the reported quarter, adjusted EBITDA was down 3% year over year to $255 million.
Financial Position
At the end of 2023, the company had $1.4 billion cash in hand, up from $1.2 billion as of the end of 2022. It recorded an operating cash flow of $991 million in 2023, down from $999.5 million reported in 2022.
Franco-Nevada is debt-free and uses its free cash flow to expand the portfolio and payout dividends. FNV now has available capital of $2.4 billion.
2023 Results
Franco-Nevada reported adjusted EPS of $3.56 in 2023 compared with $3.64 in the prior year. The company’s 2023 earnings beat the Zacks Consensus Estimate of $3.46.
Sales were down 7.3% year over year to $1.22 billion. Revenues missed the Zacks Consensus Estimate of $1.24 billion.
Guidance
Franco-Nevada expects total GEOs between 480,000 and 540,000 in 2024. GEOs from precious metal assets are expected between 360,000 and 400,000. It reported total GEOs of 498,447 in 2023. The outlook reflects an expected lower oil and gas prices.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.25% due to these changes.
VGM Scores
At this time, Franco-Nevada has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, 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 indicates a downward shift. It's no surprise Franco-Nevada has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Franco-Nevada belongs to the Zacks Mining - Gold industry. Another stock from the same industry, B2Gold (BTG - Free Report) , has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
B2Gold reported revenues of $511.97 million in the last reported quarter, representing a year-over-year change of -13.6%. EPS of $0.07 for the same period compares with $0.11 a year ago.
For the current quarter, B2Gold is expected to post earnings of $0.04 per share, indicating a change of -60% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
B2Gold has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Franco-Nevada (FNV) Up 10% Since Last Earnings Report?
A month has gone by since the last earnings report for Franco-Nevada (FNV - Free Report) . Shares have added about 10% 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 drivers.
Franco-Nevada Q4 Earnings Top Estimates, Sales Fall Y/Y
Franco-Nevada reported adjusted earnings per share (EPS) of 90 cents for the fourth quarter of 2023, up 5% from the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 80 cents.
The company generated revenues of $303 million in the reported quarter, marking a year-over-year decline of 5.3%. The downside was due to lower gas, platinum group metals and oil prices, partly offset by higher gold prices. During the December quarter, 78.7% of revenues were sourced from Precious Metal assets (65.5% gold, 10.3% silver and 2.9% platinum group metals).
The company sold 119,581 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down 7.8% from the prior-year quarter. The downside was due to lower deliveries from Cobre Panama, Candelaria and Stillwater, partially offset by higher contributions from Antapaccay, MWS and Hemlo.
In the reported quarter, adjusted EBITDA was down 3% year over year to $255 million.
Financial Position
At the end of 2023, the company had $1.4 billion cash in hand, up from $1.2 billion as of the end of 2022. It recorded an operating cash flow of $991 million in 2023, down from $999.5 million reported in 2022.
Franco-Nevada is debt-free and uses its free cash flow to expand the portfolio and payout dividends. FNV now has available capital of $2.4 billion.
2023 Results
Franco-Nevada reported adjusted EPS of $3.56 in 2023 compared with $3.64 in the prior year. The company’s 2023 earnings beat the Zacks Consensus Estimate of $3.46.
Sales were down 7.3% year over year to $1.22 billion. Revenues missed the Zacks Consensus Estimate of $1.24 billion.
Guidance
Franco-Nevada expects total GEOs between 480,000 and 540,000 in 2024. GEOs from precious metal assets are expected between 360,000 and 400,000. It reported total GEOs of 498,447 in 2023. The outlook reflects an expected lower oil and gas prices.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.25% due to these changes.
VGM Scores
At this time, Franco-Nevada has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, 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 indicates a downward shift. It's no surprise Franco-Nevada has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Franco-Nevada belongs to the Zacks Mining - Gold industry. Another stock from the same industry, B2Gold (BTG - Free Report) , has gained 5.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
B2Gold reported revenues of $511.97 million in the last reported quarter, representing a year-over-year change of -13.6%. EPS of $0.07 for the same period compares with $0.11 a year ago.
For the current quarter, B2Gold is expected to post earnings of $0.04 per share, indicating a change of -60% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
B2Gold has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.