In a May 9, research note, iA Securities analyst George Topping reported that with a strong Q1/19, Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) "continues to demonstrate that it can deliver even in a poor gold market."
Topping highlighted that the company achieved a beat during Q1/19 with respect to gold equivalent ounces (GEOs) added to its portfolio, EBITDA and cash flow per share (CFPS).
GEOs totaled 122,000 (122 Koz), exceeding iA's forecast of 105 Koz and representing a 16% quarter-over-quarter (QOQ) increase. Outperformance in Latin America and Canada drove this result.
EBITDA came in at $141 million, compared to consensus' estimate of $132 million. CFPS was $0.72 whereas consensus had projected $0.65 per share.
Q1/19 revenue for Franco-Nevada was $180 million, up 13% QOQ.
The recovery continues at Candelaria, and Cobre Panama is "coming online," Topping noted. As Cobre Panama ramps up to steady state production over the next five years, GEOs for Franco-Nevada should grow by an average of 6–7% annually, iA Securities estimated.
In other news, Topping indicated, the company's current chair, Pierre Lassonde, will leave the position as of Franco-Nevada's 2020 annual general meeting.
IA Securities has a Buy rating and a CA$115 per share target price on Franco-Nevada, whose stock is currently trading at around CA$94.78 per share.
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Disclosures from iA Securities, Franco-Nevada Corp., Research Update, May 9, 2019
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