Franco-Nevada
FNV
shares rallied 5% in the last trading session to close at $118.69. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock’s 9.1% loss over the past four weeks.
The share price appreciation can be attributed to the forecast-topping fourth-quarter 2020 results, record annual 2020 results and upbeat guidance for 2021. Franco-Nevada reported adjusted earnings of 85 cents per share during the quarter that improved 44% year over year. The company also announced the acquisition of a new precious metals stream on the Condestable copper mine in Peru and the acquisition of a portfolio of natural gas royalties in the Haynesville play in Texas.
Franco-Nevada expects attributable royalty and stream sales from its mining assets between 555,000 Gold Equivalent Ounces (GEOs) and 585,000 GEOs for the current year compared to 521,564 GEOs sold in 2020. The guidance considers the continuous ramp-up of the Cobre Panama project and contributions from recent acquisitions. With the ongoing recovery in energy prices, management anticipates generating revenues of $115-$135 million from Energy assets.
Franco-Nevada expects to produce between 600,000 and 630,000 GEOs by 2025, and generate additional revenue of $150 and $170 million from its Energy assets
Price and Consensus
This precious metals streaming and royalty company is expected to post quarterly earnings of $0.72 per share in its upcoming report, which represents a year-over-year change of +24.1%. Revenues are expected to be $284.78 million, up 18.4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Franco-Nevada, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FNV going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see
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