Franco-Nevada Maintains Hold Rating Amid Strong Earnings and Acquisitions

Franco-Nevada reported better-than-expected Q2'25 earnings with adjusted EBITDA and EPS surpassing consensus estimates. The company's sales volumes were slightly below expectations, and its valuation reflects modest long-term growth prospects. Franco-Nevada has been active in acquiring new royalties and streams, investing $1.6 billion year-to-date, and maintains a robust exposure to precious metals. The current valuation and financial position suggest a balanced outlook, justifying a Hold rating.

Franco-Nevada Corporation (NYSE: FNV) reported mixed results for the second quarter of 2025, with non-GAAP EPS of $1.24, beating estimates by $0.12. Revenue reached $369.4 million, up 42% year-over-year (YoY), but missed estimates by $2.44 million. The company sold 112,093 gross equivalent ounces (GEOs), up 2%, and 101,876 net GEOs, up 4%. Operating cash flow reached a record $430.3 million, up 121%, and $365.7 million was deployed in gold and silver streaming and royalty interests [1].

Paul Brink, CEO of Franco-Nevada, commented on the quarter's performance, stating, "I am very pleased with our record financial results this quarter. Our portfolio largely produced as expected for the quarter and higher gold prices contributed to record revenue, operating cash flow, Adjusted EBITDA margins, and earnings" [2].

The company's strong financial position was bolstered by the acquisition of royalties on IAMGOLD's Côté Gold Mine and AngloGold's Arthur Project. These acquisitions are expected to drive higher GEOs in the second half of the year. Franco-Nevada's 2025 guidance is based on assumed commodity prices for the remainder of the year, including $3,250/oz Au, $37/oz Ag, $1,300/oz Pt, $1,150/oz Pd, $90/tonne Fe 62% CFR China, $65/bbl WTI oil, and $3.00/mcf Henry Hub natural gas [1].

Revenue mix for the quarter comprised 82% precious metal, 14% energy, and 4% iron ore and other mining assets. The company's strong pipeline of precious metal and diversified opportunities, along with its commitment to sustainability, positions Franco-Nevada for long-term growth [2].

References:
[1] Seeking Alpha. (2025). Franco-Nevada Reports Mixed Q2 Results, Updates FY25 Outlook. Retrieved from https://seekingalpha.com/news/4483042-franco-nevada-reports-mixed-q2-results-updates-fy25-outlook
[2] PR Newswire. (2025). Franco-Nevada Reports Record Q2 2025 Results. Retrieved from https://www.prnewswire.com/news-releases/franco-nevada-reports-record-q2-2025-results-302526126.html