Wheaton Precious Metals — Salobo does it again

Wheaton Precious Metals (TSX: WPM)

Last close As at 07/08/2025

CAD137.19

1.72 (1.27%)

Market capitalisation

CAD62,278m

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Research: Metals & Mining

Wheaton Precious Metals — Salobo does it again

For the second quarter in succession, Wheaton Precious Metals (WPM) has announced record revenue, adjusted earnings and operational cash flows, posting adjusted net EPS that was 7.7% better than our forecast and above the top of analysts’ expectations (source: LSEG Data & Analytics, 7 August). The main reasons for the outperformance were a 12.8% positive variance in silver production coupled with a 5.0% positive variance in gold sales, which were 7.6% (or 7,005oz) above production for the quarter. Together, these drove a US$38.6m (8.3%) positive variance in revenue, only partially offset by a US$12.1m negative variance in costs, resulting in a US$20.4m positive variance in earnings and a 4.5c positive variance in adjusted net EPS. As a result, we have upgraded our FY25 adjusted net EPS forecast by 2.1c/share (0.9%). At current metals prices, our FY26 EPS estimate rises by 84.0% from that shown below to US$2.65/share.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals and mining

Q225 results and updated FY25e forecasts

8 August 2025

Price C$137.19
Market cap C$61,497m

C$1.3749/US$, US$1.3441/£

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

$1,005.9m

Shares in issue

454.0m
Code WPM
Primary exchange TSX
Secondary exchange LSE
Price Performance
% 1m 3m 12m
Abs 7.1 14.9 80.6
52-week high/low C$135.8 C$72.3

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

21 August 2025

Dividend payment date

4 September 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 84.8 0.6
12/24 1,284.6 752.5 1.41 0.62 70.7 0.6
12/25e 2,002.9 1,326.5 2.48 0.73 40.2 0.7
12/26e 1,546.6 759.9 1.44 0.77 69.2 0.8

8.9% per year organic production growth to FY30

Sales of gold attributable to WPM from Salobo were 6,914oz (or 10.0%) in excess of production and were effectively solely responsible for WPM’s balancing of the two and its drawdown in ounces produced but not yet delivered. Other notably strong operational performances were recorded by Blackwater, Penasquito and Voisey’s Bay, while eight other mines remain broadly on track to ramp up in line with our expectations over the next five years.

Valuation: Continuing to trend upwards

Using a capital asset pricing model-type method, whereby we discount cash flows at a nominal 9% per year, our terminal valuation of WPM amounts to US$76.48/share (or C$105.15/share) in FY30, assuming zero long-term growth in real cash flows (which we think unlikely). If we instead assume 7.7% per year 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$189.99/share, or C$261.22/share. As such, at an implied growth rate of 6.4% 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% per year compound), especially given that production is expected to deliver 8.9% per year organic growth between now and FY30 alone. An alternative interpretation is that the market is assuming current precious metals prices will prevail into FY30 with compound annual average increases in WPM’s cash flow per share thereafter of just 5.1%. Otherwise, assuming no purchases of additional streams, we calculate a value per share of US$59.33 (or C$81.58, or £44.14) in FY27, based on a historical multiple of 31.2x contemporary earnings (albeit at a gold price of only US$2,239/oz and a silver price of only US$25.30/oz). At current prices, however, this value rises by 83% to US$108.57/share ( C$149.28/share, or £80.78).

Updated FY25 forecasts

In the light of its Q225 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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