FNV Shares Rally 15% In A Month, Wait For A Dip To Buy The Stock

We believe there is not much to fear in FNV stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $40 Bil in market cap, Franco-Nevada provides gold-focused royalty and streaming services across mining and energy sectors, managing a portfolio of precious metals and energy resources internationally.

[1] Valuation Looks Very High

This table highlights how FNV is valued vs broader market. For more details see: FNV Valuation Ratios

[2] Growth Is Strong

• Franco-Nevada has seen its top line grow at an average rate of 0.7% over the last 3 years
• Its revenues have grown 18% from $1.1 Bil to $1.3 Bil in the last 12 months
• Also, its quarterly revenues grew 42.0% to $369 Mil in the most recent quarter from $260 Mil a year ago.

This table highlights how FNV is growing vs broader market. For more details see: FNV Revenue Comparison

[3] Profitability Appears Very Strong

• FNV last 12 month operating income was $911 Mil representing operating margin of 68.3%
• With cash flow margin of 88.1%, it generated nearly $1.2 Bil in operating cash flow over this period
• For the same period, FNV generated nearly $785 Mil in net income, suggesting net margin of about 58.8%

This table highlights how FNV profitability vs broader market. For more details see: FNV Operating Income Comparison

[4] Financial Stability Looks Strong

• FNV Debt was $0.0 at the end of the most recent quarter, while its current Market Cap is $40 Bil. This implies Debt-to-Equity Ratio of 0.0%
• FNV Cash (including cash equivalents) makes up $160 Mil of $7.0 Bil in total Assets. This yields a Cash-to-Assets Ratio of 2.3%

[4] Downturn Resilience Is Strong

FNV has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• FNV stock fell 38.2% from a high of $168.01 on 20 April 2022 to $103.80 on 12 December 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 April 2025
• Since then, the stock increased to a high of $214.17 on 22 September 2025 , and currently trades at $209.64

 
2020 Covid Pandemic

• FNV stock fell 27.1% from a high of $120.61 on 5 March 2020 to $87.98 on 13 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 13 April 2020

 
2008 Global Financial Crisis

• FNV stock fell 58.8% from a high of $24.49 on 14 July 2008 to $10.10 on 27 October 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 May 2009

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.