Freehold Royalties Ltd.

TSX:FRU Stock Report

Market Cap: CA$2.1b

Freehold Royalties Valuation

Is FRU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of FRU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FRU (CA$14.1) is trading below our estimate of fair value (CA$34.01)

Significantly Below Fair Value: FRU is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FRU?

Key metric: As FRU is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for FRU. This is calculated by dividing FRU's market cap by their current earnings.
What is FRU's PE Ratio?
PE Ratio16x
EarningsCA$132.65m
Market CapCA$2.12b

Price to Earnings Ratio vs Peers

How does FRU's PE Ratio compare to its peers?

The above table shows the PE ratio for FRU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average8.8x
NVA NuVista Energy
9.3x13.6%CA$2.7b
IPCO International Petroleum
10x8.3%CA$1.8b
ATH Athabasca Oil
12x1.7%CA$2.7b
PXT Parex Resources
4x-36.7%CA$1.5b
FRU Freehold Royalties
16x-0.7%CA$2.1b

Price-To-Earnings vs Peers: FRU is expensive based on its Price-To-Earnings Ratio (16x) compared to the peer average (8.8x).

Price to Earnings Ratio vs Industry

How does FRU's PE Ratio compare vs other companies in the CA Oil and Gas Industry?

7 CompaniesPrice / EarningsEstimated GrowthMarket Cap
HAM Highwood Asset Management
1.3x-43.9%US$65.03m
ALPS.U Alpine Summit Energy Partners
1xn/aUS$24.02m
KUB.H Carcetti Capital
0.7xn/aUS$5.82m
GCOM Green Shift Commodities
1.4xn/aUS$4.93m
FRU 16.0xIndustry Avg. 11.0xNo. of Companies11PE0816243240+
7 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: FRU is expensive based on its Price-To-Earnings Ratio (16x) compared to the Canadian Oil and Gas industry average (10.7x).

Price to Earnings Ratio vs Fair Ratio

What is FRU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FRU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio16x
Fair PE Ratio9.7x

Price-To-Earnings vs Fair Ratio: FRU is expensive based on its Price-To-Earnings Ratio (16x) compared to the estimated Fair Price-To-Earnings Ratio (9.7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst FRU forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$14.10
CA$17.20
+22.0%
8.2%CA$21.00CA$15.00n/a15
Nov ’25CA$13.58
CA$17.20
+26.7%
8.2%CA$21.00CA$15.00n/a15
Oct ’25CA$14.29
CA$17.57
+23.0%
7.9%CA$21.00CA$15.00n/a14
Sep ’25CA$13.75
CA$17.68
+28.6%
7.7%CA$21.00CA$15.00n/a14
Aug ’25CA$13.70
CA$17.68
+29.0%
7.7%CA$21.00CA$15.00n/a14
Jul ’25CA$13.62
CA$17.93
+31.6%
7.4%CA$21.00CA$15.00n/a14
Jun ’25CA$14.47
CA$17.93
+23.9%
7.4%CA$21.00CA$15.00n/a14
May ’25CA$13.96
CA$17.89
+28.2%
7.5%CA$21.00CA$15.00n/a14
Apr ’25CA$14.61
CA$17.88
+22.3%
7.8%CA$21.00CA$15.00n/a14
Mar ’25CA$13.84
CA$18.25
+31.9%
6.2%CA$20.00CA$16.00n/a13
Feb ’25CA$13.78
CA$18.30
+32.8%
6.2%CA$20.00CA$16.00n/a14
Jan ’25CA$13.69
CA$19.05
+39.2%
5.4%CA$20.50CA$16.75n/a14
Dec ’24CA$13.96
CA$19.08
+36.7%
7.2%CA$20.50CA$15.50n/a15
Nov ’24CA$14.49
CA$19.12
+31.9%
6.7%CA$20.50CA$16.00CA$13.5815
Oct ’24CA$14.70
CA$18.92
+28.7%
6.8%CA$20.00CA$16.00CA$14.2915
Sep ’24CA$14.64
CA$18.85
+28.8%
6.6%CA$20.00CA$16.00CA$13.7515
Aug ’24CA$14.05
CA$19.05
+35.6%
9.2%CA$24.00CA$16.00CA$13.7015
Jul ’24CA$13.44
CA$19.38
+44.2%
6.2%CA$21.00CA$17.00CA$13.6215
Jun ’24CA$13.92
CA$19.64
+41.1%
8.3%CA$24.00CA$17.00CA$14.4716
May ’24CA$14.67
CA$19.77
+34.7%
8.6%CA$24.00CA$17.00CA$13.9616
Apr ’24CA$14.53
CA$20.30
+39.7%
7.7%CA$24.00CA$17.00CA$14.6116
Mar ’24CA$15.70
CA$20.41
+30.0%
9.8%CA$27.00CA$18.00CA$13.8416
Feb ’24CA$15.50
CA$20.47
+32.1%
9.7%CA$27.00CA$18.00CA$13.7816
Jan ’24CA$15.83
CA$20.59
+30.1%
9.3%CA$27.00CA$18.00CA$13.6916
Dec ’23CA$16.62
CA$20.66
+24.3%
9.2%CA$27.00CA$18.00CA$13.9616
Nov ’23CA$16.96
CA$20.09
+18.5%
11.0%CA$27.00CA$16.50CA$14.4916

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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