Here’s What’s Driving Analyst Estimates for Franco-Nevada


Dec. 4 2020, Updated 10:53 a.m. ET

Franco-Nevada’s revenue estimates

Analysts are calling for average revenues of $678.5 million for 2017 for Franco-Nevada (FNV). That implies a growth of 11.2% YoY (year-over-year). It reported strong quarters in 2017 due to its portfolio diversity. Analysts are also expecting its revenues to grow in 2018 and 2019. Growth in 2018 is slated at 2.4%, and growth in 2019 is expected to be 10.6% YoY.

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FNV’s earnings estimates

In line with the increase in revenues, analysts are also projecting an increase in FNV’s EBITDA (earnings before interest, tax, depreciation, and amortization) by 5.4% YoY in 2017. EBITDA for 2017 implies a margin of 76%. That’s projected to increase to 77.9% in 2018 and 77.1% in 2019.

Higher margins for royalty companies

Overall, royalty and mining companies have higher margins than their mining peers. That’s mainly due to lower direct costs. Most costs are related to production taxes and administration. One-year forward margins for Wheaton Precious Metals (WPM), Royal Gold (RGLD), and Sandstorm Gold (SAND) are 68.8%, 72.7%, and 67.6%, respectively. In comparison, among miners (GDX), Barrick Gold (ABX) boasts one of the highest margins at 48.6%. Goldcorp (GG), Kinross Gold (KGC), and Agnico Eagle Mines (AEM) have lower margins of 46.7%, 39%, and 44.3%, respectively.


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