A month has gone by since the last earnings report for Franco-Nevada (FNV). Shares have added about 3.8% 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 catalysts.

Franco-Nevada reported adjusted earnings of 75 cents per share in second-quarter 2024, missing the Zacks Consensus Estimate of 78 cents. The bottom line decreased 21% year over year. The company generated revenues of $260 million in the reported quarter, down 21.2% year over year. The downside was driven by lower contributions from Antapaccay, Candelaria and Energy assets, partially offset by record gold prices. In the June-end quarter, 74.2% of revenues were sourced from Precious Metal assets (60.3% gold, 10.8% silver and 3.1% platinum group metals). The company sold 82,350 Gold Equivalent Ounces (GEOs) from precious metal assets in the reported quarter, down from the prior-year quarter’s 132,033 GEOs. In the reported quarter, adjusted EBITDA was down 19.5% year over year to $222 million. The adjusted EBITDA margin was 85.3% in the quarter under review compared with the prior-year quarter’s 83.5%.

Franco-Nevada's Financial Health

The company had $1.44 billion cash in hand at the end of the second quarter of 2024, up from $1.42 billion as of the end of 2023. It recorded an operating cash flow of $373 million in the first half of 2024, down from $472 million in the prior-year period. 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 $2.4 billion.

Analyst Ratings and Valuation

It turns out, estimates revision flatlined during the past month.

At this time, Franco-Nevada has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, 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.

Franco-Nevada has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Franco-Nevada belongs to the Zacks Mining - Gold industry. Another stock from the same industry, Agnico Eagle Mines (AEM), has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Agnico reported revenues of $2.08 billion in the last reported quarter, representing a year-over-year change of +20.9%. EPS of $1.07 for the same period compares with $0.65 a year ago.

Agnico is expected to post earnings of $0.90 per share for the current quarter, representing a year-over-year change of +104.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.5%.

Agnico 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.

Technical Analysis: Is FNV a Buy or Sell?

The technical summary data tells us to buy FNV near 120.08 with an upside target of 131.55. This data also tells us to set a stop loss @ 119.73 to protect against excessive loss in case the stock begins to move against the trade. 120.08 is the first level of support below 126.34 , and by rule, any test of support is a buy signal. In this case, support 120.08 is being tested, a buy signal would exist.

The technical summary data is suggesting a short of FNV as it gets near 131.55 with a downside target of 120.08. We should have a stop loss in place at 131.93though. 131.55 is the first level of resistance above 126.34, and by rule, any test of resistance is a short signal. In this case, if resistance 131.55 is being tested, a short signal would exist.

If 127.85 begins to break higher, the technical summary data tells us to buy FNV just slightly over 127.85, with an upside target of 131.55. The data also tells us to set a stop loss @ 127.48 in case the stock turns against the trade. 127.85 is the first level of resistance above 126.34, and by rule, any break above resistance is a buy signal. In this case, 127.85, initial resistance, would be breaking higher, so a buy signal would exist. Because this plan is based on a break of resistance, it is referred to as a Long Resistance Plan.

The technical summary data is suggesting a short of FNV if it tests 127.85 with a downside target of 124.33. We should have a stop loss in place at 128.22 though in case the stock begins to move against the trade. By rule, any test of resistance is a short signal. In this case, if resistance, 127.85, is being tested a short signal would exist. Because this plan is a short plan based on a test of resistance it is referred to as a Short Resistance Plan.

Institutional Investor Activity and Analyst Opinions

Franco-Nevada Co. (NYSE:FNV - Get Free Report) TSE: FNV was the target of a large drop in short interest during the month of August. As of August 31st, there was short interest totalling 2,950,000 shares, a drop of 6.1% from the August 15th total of 3,140,000 shares. Based on an average daily volume of 594,200 shares, the short-interest ratio is presently 5.0 days. Currently, 1.5% of the company's stock are short sold.

Institutional investors and hedge funds have recently modified their holdings of the stock. Scotia Capital Inc. boosted its stake in Franco-Nevada by 27.1% during the fourth quarter. Scotia Capital Inc. now owns 149,153 shares of the basic materials company's stock valued at $16,474,000 after buying an additional 31,796 shares during the last quarter. Allianz Asset Management GmbH increased its holdings in shares of Franco-Nevada by 108.1% in the 4th quarter. Allianz Asset Management GmbH now owns 455,239 shares of the basic materials company's stock worth $50,671,000 after buying an additional 236,503 shares during the last quarter. Alberta Investment Management Corp raised its position in shares of Franco-Nevada by 2.3% during the 4th quarter. Alberta Investment Management Corp now owns 447,633 shares of the basic materials company's stock valued at $49,825,000 after buying an additional 10,250 shares in the last quarter. Bornite Capital Management LP bought a new position in shares of Franco-Nevada in the 4th quarter valued at about $8,167,000. Finally, Trexquant Investment LP purchased a new position in Franco-Nevada in the fourth quarter worth about $2,104,000. Institutional investors own 77.06% of the company's stock.

Several equities research analysts recently commented on FNV shares. Scotiabank increased their price objective on Franco-Nevada from $141.00 to $142.00 and gave the company a "sector perform" rating in a research report on Monday, August 19th. TD Securities raised shares of Franco-Nevada from a "hold" rating to a "buy" rating in a report on Thursday, August 15th. HC Wainwright restated a "buy" rating and issued a $185.00 target price on shares of Franco-Nevada in a report on Friday, August 16th. Jefferies Financial Group increased their price target on Franco-Nevada from $129.00 to $133.00 and gave the company a "hold" rating in a report on Friday, July 12th. Finally, Bank of America raised their price target on Franco-Nevada from $141.00 to $142.00 and gave the stock a "buy" rating in a research note on Wednesday, June 26th. Four research analysts have rated the stock with a hold rating and six have assigned a buy rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $152.75.

FNV's Recent Trading Activity

Shares of FNV traded down $0.63 during mid-day trading on Wednesday, reaching $123.93. The stock had a trading volume of 607,150 shares, compared to its average volume of 650,276. The business has a fifty day moving average of $123.57 and a 200 day moving average of $121.26. The firm has a market cap of $23.85 billion, a price-to-earnings ratio of -50.02, a PEG ratio of 20.59 and a beta of 0.76. Franco-Nevada has a 12 month low of $102.29 and a 12 month high of $145.74.

Franco-Nevada's Business Model

Franco-Nevada Corporation operates as a gold-focused royalty and streaming company in South America, Central America, Mexico, the United States, Canada, and internationally. It operates through Mining and Energy segments. The company manages its portfolio with a focus on precious metals, such as gold, silver, and platinum group metals; and engages in the sale of crude oil, natural gas, and natural gas liquids through a third-party marketing agent.

Conclusion: What's Next for FNV?

Franco-Nevada's recent earnings report was disappointing, but the company remains financially strong and is well-positioned to benefit from long-term growth in the gold market. While the stock has been underperforming recently, analyst ratings suggest that it could be a good buy for investors with a long-term horizon. However, it is important to note that the stock's technical analysis suggests that it could be due for a pullback in the short term.

Ultimately, whether to buy or sell FNV is a decision that each investor must make based on their own individual circumstances and investment goals.