Wheaton Precious Metals is the world’s pre-eminent ostensibly precious metals streaming company, with over 30 high-quality precious metals streams and early deposit agreements over mines in Mexico, Canada, Brazil, Chile, the US, Argentina, Peru, Sweden, Greece, Portugal and Colombia.
Using a capital asset pricing model-type method, whereby we discount cash flows at a nominal 9% per year, our ‘terminal’ valuation of WPM in FY26 is US$52.96/share, assuming zero subsequent long-term growth in real cash flows. If we instead assume 7.4% pa long-term growth in cash flows, however, (ie the compound average annual gold price growth rate since 1967) our valuation of WPM increases manyfold to US$174.25/share. Alternatively, assuming no purchases of additional streams (which we think unlikely), we calculate a value per share for WPM of US$49.28 in FY26, based on an historical multiple of 30.8x contemporary earnings. Q1 results are scheduled for 9 May.
Metals & Mining |
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Metals & Mining |
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Metals & Mining |
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Metals & Mining |
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Emma Murray
Director of investor relations
Gary D. Brown
CFO
Patrick Drouin
SVP, Investor Relations
Randy V. J. Smallwood
CEO
Forecast net cash (US$m)
297.1
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 7.4 | 27.0 | 13.7 |
Relative | 4.2 | 21.0 | 3.2 |
52 week high/low | C$76.3/C$52.9 |
Wheaton’s (WPM’s) Q124 results exceeded both our and the market’s forecasts. It produced more (with the single exception of gold, which recorded a small negative variance in production) and sold more at higher prices than our prior expectations for the period. This led to a positive 5.6% (US$15.8m) variance in sales that was minimally counteracted by a US$0.8m negative variance in costs (including G&A costs) to result in a US$15.3m (10.3%) positive variance in pre-tax profits that, to all intents and purposes, fell straight through to the bottom line.
Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 1065.1 | 735.2 | 505.4 | 112.0 | 48.6 | 33.3 |
2023A | 1016.0 | 719.7 | 533.4 | 118.0 | 46.2 | 34.0 |
2024E | 1251.8 | 951.1 | 712.1 | 132.0 | 41.3 | 25.7 |
2025E | 1427.1 | 1050.3 | 711.0 | 135.0 | 40.3 | 23.5 |