Wheaton Precious Metals

US: WPM

CA$12881.3m market cap

CA$28.99 last close

Wheaton Precious Metals is the pre-eminent ostensibly precious metals streaming company, with c 30 high quality, precious metals streaming and early deposit agreements relating to assets in Mexico, Peru, Canada, Brazil, Chile, Argentina, Sweden, Greece, Portugal and the US.

Investment summary

Production of gold, silver and palladium attributable to WPM from its streaming assets were all better than our expectations in Q3, as a result of which the company expects to exceed its previous guidance for FY18. Since then, Vale has announced the Salobo III brownfields mine expansion to increase processing capacity by 50% from H122. Probably more importantly, in December, WPM announced that it had reached a ‘principled settlement’ with the Canada Revenue Agency (CRA), such that foreign income on earnings generated by WPM’s international subsidiaries is not subject to tax in Canada in future.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 891.6 602.7 269.8 62.0 35.1 15.4
2017A 843.2 564.7 277.4 63.0 34.5 17.1
2018E 792.8 499.1 200.4 40.0 54.4 19.0
2019E 844.6 536.1 208.8 47.0 46.3 18.0
Last updated on 20/02/2019
Industry outlook

Assuming no purchases of additional streams, we forecast a value for WPM of US$31.95/sh (C$42.77/sh) in FY20. In the meantime, it is trading on near-term financial ratios that are cheaper than its royalty/streaming peers on 70% of financial measures and the averages of the miners themselves in a majority of the same measures, despite being associated with materially less operating and cost risk.

Last updated on 20/02/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1249.8
Forecast gearing ratio (%) 25
Price performance
%
1m
3m
12m
Actual 14.8 37.8 18.7
Relative* 9.6 27.9 14.3
52-week high/low C$29.7/C$20.1
*% relative to local index
Key management
Randy V. J. Smallwood CEO
Gary D. Brown CFO
Patrick Drouin Director of Investor Relations
Rory Quinn IR

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