Buy Rating Affirmed for Franco-Nevada Amid Strong Financials and Bullish Precious Metals Market

Analyst Heiko Ihle from H.C. Wainwright reiterated a Buy rating on Franco-Nevada (FNV – Research Report) and increased the price target to $185.00 from $175.00.

Heiko Ihle has given his Buy rating due to a combination of factors, among which the company’s strong financial results despite certain operational challenges stand out. In the first quarter of 2024, Franco-Nevada experienced a revenue decrease, mainly due to the expected decline in gold equivalent ounces as the Cobre Panama remained closed. However, this was partially offset by a gold price rally, along with the initiation of production at Salares Norte and the anticipated production from Greenstone and Tocantinzinho within the next year. Ihle emphasizes the robustness of Franco-Nevada’s financials, highlighting their healthy balance sheet with significant cash reserves, ample available capital, and no debt, positioning the company well for future growth and resilience.

Further bolstering the Buy rating is the revision of the precious metal price deck in response to the strong performance of gold and silver prices, driven by macroeconomic factors and the inflationary environment. Ihle notes the increase in gold and silver prices over the past year and the potential for these assets to benefit from the current economic climate. Despite the upward revision in the price estimates for gold and silver, which are still conservative compared to current spot prices, the new forecasts are quite favorable and are applied to the broader coverage universe in the metals and mining sector. Ihle’s outlook is underpinned by these revised estimates, suggesting a bullish perspective on Franco-Nevada’s future in light of the broader precious metals market.

In another report released on May 3, Raymond James also maintained a Buy rating on the stock with a C$151.00 price target.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FNV in relation to earlier this year.

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Franco-Nevada (FNV) Company Description:

Founded in 2007, Canada-based Franco-Nevada Corp. operates as a gold-focused royalty and stream company. It operates through two segments: Mining and Energy. The company manages its portfolio, with a focus on precious metals such as gold, silver, and platinum group metals, as well as energy comprising oil, gas, and natural gas liquids.