Valued at a market cap of almost $50 billion, Franco-Nevada (TSX:FNV) stock is up 58% in the last 12 months. Franco-Nevada operates as a royalty and streaming company, generating revenue through royalties and streams on gold, silver, and other commodities.
It does not operate any mines but invests in projects managed by other companies. In return for these investments, Franco-Nevada receives a portion of the production or revenue.
An asset-light model has allowed the TSX stock to crush broader market returns over the past decade. Since September 2015, FNV has returned more than 400% to shareholders.
Is this outperformance expected to continue in the near term, given that gold prices continue to touch record prices every other week? Let’s see if you should own the Canadian mining stock right now.
Is Franco-Nevada stock still a good buy right now?
Franco-Nevada reported record financial results for the second quarter (Q2) of 2025, surpassing an already strong Q1 performance with new highs across multiple metrics.
In the June quarter, the royalty and streaming company reported record revenue of US$369.4 million, a 42% increase year over year, driven by higher precious metal prices.
In Q2, the total gold equivalent ounces (GEO) sold rose 2% to 112,093, while precious metal GEOs rose 12% to 92,449 ounces. Franco-Nevada explained that a 40% increase in average gold prices and substantial contributions from key assets helped it deliver record revenue in Q2.
It also reported an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$365.7 million, representing a 65% year-over-year increase. The company’s margin per GEO approached US$3,000, which showcases the leverage inherent in Franco-Nevada’s business model during periods of elevated precious metal prices.
During the quarter, Franco-Nevada acquired a royalty on IAMGOLD’s Cote Gold Mine, one of Canada’s newest large-scale gold operations, which has already begun contributing to revenue.
It also received positive developments regarding Cobre Panama, with approval of preservation plans and shipment of remaining copper concentrate, signalling potential progress toward a restart. Franco-Nevada expects to receive approximately 10,000 GEOs from Cobre Panama in the third quarter as concentrate deliveries resume.
The company maintains its full-year guidance of 465,000 to 525,000 total GEOs. Moreover, the management indicated that production could trend toward the upper end of the range given recent acquisitions and operational improvements.
Franco-Nevada expanded its Nevada exposure by acquiring a royalty interest in AngloGold’s Arthur project for US$250 million, demonstrating its continued aggressive expansion of a high-quality asset portfolio in favourable mining jurisdictions.
Is the TSX stock undervalued right now?
A challenging macro environment, geopolitical tensions, and the possibility of multiple interest rate cuts should help gold prices remain elevated in the near term.
Analysts tracking the TSX stock forecast adjusted earnings to grow from US$3.21 per share in 2024 to US$5.70 per share in 2027. In this period, free cash flow is expected to expand from US$423.5 million to US$1.48 billion.
Franco-Nevada stock is priced at 35 times 2027 earnings, which is quite steep, especially if gold prices stabilize over the next year. It’s unlikely that FNV stock will continue to deliver outsized gains to shareholders over the next 24 months. Given consensus price target estimates, FNV stock trades at a premium of 2% in September 2025.
