Royalty companies’ ratings
Royalty and streaming companies are more stable since their cash flows are much more predictable than miners (GDX). This stability is probably why analysts don’t have many “sell” ratings on these stocks. Among the five major royalty or streaming companies, only Franco-Nevada (FNV) has a “sell” rating. Out of a total of 19 analysts covering the stock, 53% have a “buy” rating and 42% have a “hold” rating. Its consensus target price is $68. This implies a potential downside of 3%. CIBC has the highest target price on the stock of $73.8. J.P. Morgan (JPM) has the lowest target price of $62.
After Franco’s 1Q16 results, CIBC increased its target price from 88 Canadian dollars to 95 Canadian dollars.
Credit Suisse (CS) reiterated its “neutral” rating on Franco-Nevada with a target price of $63 on May 5, 2016.
National Bank Financial also increased its target price from 91 Canadian dollars to 92 Canadian dollars on May 5. It reiterated its “outperform” rating.
Canaccord Genuity also reiterated its “hold” rating with a target price of $67 on the stock.