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)
256.2
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 8.6 | 14.2 | 4.4 |
Relative | 9.9 | 10.3 | (2.4) |
52 week high/low | C$73.8/C$52.9 |
WPM’s production and sales in FY23 were both higher than our prior expectations after a strong Q4 driven by Salobo. Production guidance for FY24 is 550–620koz GEO. However, we expect significant growth in output thereafter to almost 900koz GEO by FY29. Henceforward, the company has also adopted a progressive dividend policy.
Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 1065.1 | 735.2 | 505.4 | 112.0 | 46.4 | 31.8 |
2023A | 1016.0 | 719.7 | 533.4 | 118.0 | 44.0 | 32.4 |
2024E | 1190.8 | 873.8 | 636.9 | 118.0 | 44.0 | 26.3 |
2025E | 1538.5 | 1135.0 | 748.3 | 142.0 | 36.6 | 20.8 |