Franco-Nevada Corporation (TSE:FNV) Just Reported Third-Quarter Earnings And Analysts Are Lifting Their Estimates

Franco-Nevada Corporation (TSE:FNV) shareholders are probably feeling a little disappointed, since its shares fell 7.3% to CA$170 in the week after its latest quarterly results. Results were roughly in line with estimates, with revenues of US$276m and statutory earnings per share of US$0.79. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Franco-Nevada

Following the latest results, Franco-Nevada's eight analysts are now forecasting revenues of US$1.34b in 2025. This would be a major 23% improvement in revenue compared to the last 12 months. Franco-Nevada is also expected to turn profitable, with statutory earnings of US$3.71 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.28b and earnings per share (EPS) of US$3.34 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$205, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Franco-Nevada at CA$235 per share, while the most bearish prices it at CA$189. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Franco-Nevada's past performance and to peers in the same industry. The analysts are definitely expecting Franco-Nevada's growth to accelerate, with the forecast 18% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Franco-Nevada is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Franco-Nevada's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Franco-Nevada analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Franco-Nevada Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.