Wheaton Precious Metals — Records tumbling

Wheaton Precious Metals (TSX: WPM)

Last close As at 08/05/2025

CAD114.99

−2.48 (−2.11%)

Market capitalisation

CAD52,187m

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Research: Metals & Mining

Wheaton Precious Metals — Records tumbling

Wheaton announced record revenue, earnings and operational cash flows in Q125, posting adjusted net EPS that was 10.5% better than our forecast and at the top of the range of analysts’ expectations. The main reason for the outperformance was an 18,616oz (20.1%) oversale of gold relative to production, which drove a US$40.1m positive variance in revenue, partially offset by an US$8.6m negative variance in costs, US$3.6m lower-than-expected interest income and US$2.3m higher tax to result in a US$23.9m positive variance in earnings. As a result, we have upgraded our FY25 adjusted net EPS forecast by 7.5c per share (3.4%). Note that, at current metals prices, our FY26 EPS estimate rises by 73.0% to US$2.63/share.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals and mining

Q125 results and updated FY25e forecasts

9 May 2025

Price C$114.99
Market cap C$53,593m

C$1.3928/US$, US$1.3238/£

Net cash at end Q125 (excluding US$8.1m in lease liabilities)

$1,085.6m

Shares in issue

453.8m
Code WPM
Primary exchange TSX
Secondary exchange LSE
Price Performance
% 1m 3m 12m
Abs 17.3 23.7 62.3
52-week high/low C$120.6 C$70.7

Business description

Wheaton Precious Metals (WPM) is the world’s pre-eminent predominantly precious metals streaming company, with over 40 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 etc.

Next events

Ex-dividend date

28 May 2025

Dividend payment date

10 June 2025

Q225 results

7 August 2025

Q325 results

6 November 2025

Analyst

Lord Ashbourne
+44 (0)20 3077 5700

Wheaton Precious Metals is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

Year end Revenue ($m) PBT ($m) EPS ($) DPS ($) P/E (x) Yield (%)
12/23 1,016.0 533.4 1.18 0.60 70.3 0.7
12/24 1,284.6 752.5 1.41 0.62 58.6 0.7
12/25e 1,834.0 1,208.8 2.25 0.79 36.7 1.0
12/26e 1,621.2 802.7 1.52 0.78 54.3 0.9

Majority of mines outperforming expectations

Of its 14 producing mines, 10 either outperformed or performed in line with our expectations in terms of production, while 11 did so in terms of sales. Salobo performed almost exactly in line with our expectations, given its copper output for the quarter, but was responsible for the majority of Wheaton’s 22,744oz drawdown in gold ounces produced but not yet delivered. Over the next six years, we are forecasting that WPM’s attributable production will grow by more than half, from 635k gold equivalent ounces (GEOs) in FY24 to c 979k GEOs in FY30.

Valuation: Continuing to trend upwards

Using a capital asset pricing model-type method, where we discount cash flows at a nominal 9% per year, our terminal valuation of WPM amounts to US$75.12 (or C$104.63) in FY30, assuming zero subsequent long-term growth in real cash flows (which we think unlikely). If we instead assume 7.7% pa long-term growth in cash flows (ie the average compound annual growth rate in the price of gold from 1967 to 2024), our current valuation of WPM in FY25 more than doubles to US$186.57/share, or C$259.86/share. As such, at an implied growth rate of 5.9% per year, WPM’s share price currently appears to be discounting future compound annual average increases in cash flows per share from FY30 well below historical levels (+14.3% pa compound) and only slightly above the long-term average US dollar inflation rate of 4.0% from 1967 to 2024. However, an alternative interpretation is that the market is assuming that current precious metals prices will prevail into FY30 with compound annual average increases in WPM’s cash flow per share thereafter of just 4.6%. Otherwise, assuming no purchases of additional streams, we calculate a value per share for WPM of US$59.40 (or C$82.74, or £44.87) in FY27, based on a historical multiple of 31.2x contemporary earnings (albeit at a gold price of only US$2,239/oz). At current prices, this valuation rises by 61% to US$98.43/share (or C$137.10/share, or £74.35). In the meantime, WPM’s average P/E multiple of 38.0x in FY18–24 implies a current year share price of US$85.76/share, or C$119.44/share (£64.78/share), in FY25.

Updated FY25 forecasts

In the light of its Q125 results, we have revised our forecasts for the remainder of the year for Wheaton to those shown in Exhibit 1, below.

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