Jefferies sets Franco-Nevada stock at Hold rating on gold outlook

Published 12/07/2024, 15:30
Jefferies sets Franco-Nevada stock at Hold rating on gold outlook

On Friday, Jefferies updated their outlook on Franco-Nevada Corp (NYSE:FNV), raising the price target to $133.00 from the previous $129.00 while maintaining a Hold rating on the stock. The firm anticipates an increase in quarter-over-quarter earnings and cash flow for the company, attributing this expected growth to a stronger gold price environment observed during Q2.

The analyst from Jefferies forecasts a dip in Gold Equivalent Ounces (GEOs) from mining activities, which is likely to be balanced by a rise in GEOs from Franco-Nevada's royalties on energy assets. Additionally, slight decreases in cost of sales, general and administrative expenses, depreciation, depletion, and amortization, as well as share-based compensation, are expected.

The firm's analysis suggests that Franco-Nevada's GEOs, earnings, and cash flow should see a sequential rise over the next three quarters. The second half of the year's GEOs are projected to account for just over half of the analyst's annual estimate. Based on these forecasts, Jefferies believes that Franco-Nevada is on track to meet its full-year guidance.

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