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Franco-Nevada Lifts Guidance on Excellent Q2 Results
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Franco-Nevada Lifts Guidance on Excellent Q2 Results

Canada-based Franco-Nevada Corp. (FNV) has reported excellent financial results for the second quarter of 2021. The company owns streams and royalties in gold mining and other natural resource and commodity investments.

Adjusted earnings per share (EPS) almost doubled year-over-year to $0.96, beating the Street’s estimate of $0.27. Quarterly revenue surged 78% to $347.1 million, exceeding analysts’ expectations of $170.05 million. (See Franco-Nevada stock chart on TipRanks)

Mining revenue totaled nearly $300 million, up from $180.8 million reported in the second quarter of 2020. Revenue from Energy assets rose to $47.3 million, compared to $14.6 million last year.

Gold Equivalent Ounces (GEOs) sold increased around 60% year-over-year to 166,856 driven by additions of the Vale Royalty Debentures and Condestable stream, and increased contributions from the largest streams.

The President and CEO of Franco-Nevada, Paul Brink, said, “Franco-Nevada is on track to achieve record results in 2021, thanks to both organic growth and the acquisitions completed in the first half of the year. We have raised the bottom end of our GEOs sold guidance and, with the recovery in energy prices, have materially increased our Energy revenue guidance for the year.”

For 2021, the company has increased the GEOs sold guidance range to 590,000 – 615,000. Furthermore, it expects energy revenue to range from $155 million to $170 million, up from the previous projection of $115 million to $135 million.

Franco-Nevada’s shares closed 1.5% higher at $155.11 on Wednesday.

Recently, RBC Capital analyst Josh Wolfson maintained a Hold rating on the stock with a price target of $135 (13% downside potential). The analyst expects the company to report EPS of $0.90 in the third quarter.

Overall, the stock has a Hold consensus based on 1 Buy, 5 Holds and 2 Sells. The average Franco-Nevada price target of $152.92 implies 1.4% downside potential. Shares of the company have gained 28% over the past six months.

According to TipRanks’ Smart Score rating system, Franco-Nevada scores a 5 out of 10, suggesting that the stock is likely to perform in line with market averages.

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