雅虎香港財經 Why Is Franco-Nevada (FNV) Up 2.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Franco-Nevada (FNV). Shares have added about 2.8% in that time frame, underperforming 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 Earnings Beat Estimates in Q1, Dip Y/Y
Franco-Nevada reported adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 68 cents. The 4% year-over-year decline in its bottom line was mainly attributed to lower Gold Equivalent Ounces (GEOs) sold in the quarter. Notably, FNV’s adjusted net income margin came in at 56.9% in the first quarter of 2024, indicating a year-over-year expansion of 180 basis points.
The company generated revenues of $257 million in the reported quarter, down 7.1% year over year. Increased gold prices were offset by fewer GEOs sold in the quarter. In the March-end quarter, 78.7% of revenues were sourced from Precious Metal assets (62.7% gold, 9.7% silver and 3.1% platinum group metals).
FNV sold 93,018 GEOs from Precious Metal assets in the reported quarter, down 16% from the prior-year quarter. The downside was due to lower deliveries from Cobre Panama (as the mine remains in preservation and safe management) and Antamina, partially offset by higher contributions from Antapaccay, Guadalupe-Palmarejo and Subika.
In the reported quarter, the adjusted EBITDA was down 5.8% year over year to $216 million. Adjusted EBITDA margin was 84.2% in the quarter, indicating an expansion from 83% in the first quarter of 2023.
Financial Position
The company had $1.35 billion of cash in hand at the end of the first quarter of 2024, down from $1.42 billion as of the end of 2023. It recorded an operating cash flow of $179 million in the first quarter of 2024, down from $210 million at the end of 2023.
Franco-Nevada is debt-free and uses its free cash flow to expand its portfolio and pay out dividends. FNV now has an available capital of $2.3 billion.
Guidance
At the end of the fourth quarter of 2033, Franco-Nevada projected total GEOs between 480,000 and 540,000 for 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 indicates lower expected oil and gas prices.
How Have Estimates Been Moving Since Then?
Estimates revision followed an upward path over the past two months.
VGM Scores
At this time, Franco-Nevada has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Franco-Nevada has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Franco-Nevada is part of the Zacks Mining - Gold industry. Over the past month, Agnico Eagle Mines (AEM), a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended March 2024 more than a month ago.
Agnico reported revenues of $1.83 billion in the last reported quarter, representing a year-over-year change of +21.2%. EPS of $0.76 for the same period compares with $0.57 a year ago.
For the current quarter, Agnico is expected to post earnings of $0.81 per share, indicating a change of +24.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Agnico. Also, the stock has a VGM Score of C.
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