FRANCO-NEVADA CORPOR

FNV
Delayed Quote. Delayed  - 09/24 04:15:27 pm
166.34CAD -0.99%

Franco-Nevada Corporation : The trend should regain control

07/30/2021 | 02:37am
Jordan Dufee
Senior Analyst

Strategy published on : 07/30/2021 | 02:37

long trade
Stop-loss triggered

Entry price : 198.12CAD
Target : 240CAD
Stop-loss : 178CAD
Potential : 21.14%

The timing appears opportune to go long in shares of Franco-Nevada Corporation as we anticipate another pick-up in the underlying trend.
Investors have an opportunity to buy the stock and target the CAD 240.

Summary

● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.


Strengths

● Before interest, taxes, depreciation and amortization, the company's margins are particularly high.

● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.

● Thanks to a sound financial situation, the firm has significant leeway for investment.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.

● Consensus analysts have strongly revised their opinion of the company over the past 12 months.

● Considering the small differences between the analysts' various estimates, the group's business visibility is good.


Weaknesses

● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 53.31 times its estimated earnings per share for the ongoing year.

● The company's "enterprise value to sales" ratio is among the highest in the world.

● In relation to the value of its tangible assets, the company's valuation appears relatively high.

● The valuation of the company is particularly high given the cash flows generated by its activity.

● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

● The average consensus view of analysts covering the stock has deteriorated over the past four months.

● The price targets of various analysts who make up the consensus differ significantly. This reflects different assessments and/or a difficulty in valuing the company.

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