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.
Wheaton’s shares are trading on near-term financial ratios that are cheaper than those of its peers on 69% of common valuation measures which otherwise imply a WPM share price in 2022 of US$44.40, or C$56.89 or £36.82 (based on Edison forecasts). Using a CAPM-type methodology, we calculate a terminal value for WPM of US$57.33 (C$73.29) per share in FY26. Alternatively, if precious metals return to favour, then we believe that a near-term valuation of US$58.50 (C$74.79 or £48.41) per share is possible. This follows the settlement between WPM and the CRA in December 2018 which exempted WPM’s international subsidiaries from Canadian tax. Q3 results are scheduled for 3 November.
Metals & Mining
Gary D. Brown
CFO
Jacy Zerb
Director, Investor Relations
Patrick Drouin
SVP, Investor Relations
Randy V. J. Smallwood
CEO
Forecast net cash (US$m)
494.9
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 13.9 | 38.7 | 21.9 |
Relative | 7.9 | 28.5 | 21.9 |
52 week high/low | C$64.7/C$39.1 |
Wheaton Precious Metals produced 159,852 gold equivalent ounces (GEOs) in Q322, of which it sold 138,824 GEOs, representing a positive variance of 2.8% and a negative variance of 0.7% relative to our prior estimates, respectively. Its adjusted net earnings were US$1.4m, or 1.6%, above our prior forecast at US$93.9m and the fourth quarterly dividend for the year was maintained at US$0.15/share. In the wake of Q3 results we have revised our forecasts for Q422 and FY22 only very fractionally.
Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2020A | 1096.2 | 763.8 | 503.2 | 112.0 | 41.2 | 26.4 |
2021A | 1201.7 | 852.7 | 592.1 | 132.0 | 35.0 | 24.4 |
2022E | 1094.6 | 759.0 | 505.6 | 113.0 | 40.9 | 26.3 |
2023E | 1354.2 | 970.9 | 662.8 | 147.0 | 31.4 | 21.4 |
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