Wheaton Precious Metals

US: WPM

CA$14632m market cap

CA$32.93 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

Wheaton Precious Metals’ (WPM’s) FY18 production outcome exceeded guidance for all of its products (namely gold, silver and palladium) to the point at which gold production and sales also achieved new records. Not only was gold production during the quarter ahead of guidance (which was expected), but it was also materially ahead of our prior expectations, driven by a 12.2% increase in production attributable from Salobo, and accounted for 64.3% of WPM sales. Of note was the fact that unit cash costs for both gold and silver declined compared with Q318.

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 40.2 17.6
2017A 843.2 564.7 277.4 63.0 39.6 19.5
2018E 792.8 499.1 200.4 40.0 62.3 21.7
2019E 844.6 536.1 208.8 47.0 53.0 20.6
Last updated on 22/03/2019
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. Q418/FY18 results are scheduled for 20 March.

Last updated on 22/03/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 1249.8
Forecast gearing ratio (%) 25
Price performance
%
1m
3m
12m
Actual 11.7 28.0 26.5
Relative* 11.2 10.9 21.1
52-week high/low C$32.9/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

Content on Wheaton Precious Metals