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Wheaton Precious Metals (TSE:WPM)
TSX:WPM
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Wheaton Precious Metals
(TSX:WPM)
75Outperform
Positive Factors
Financial Strength
WPM held $540 million of cash and equivalents, which when combined with borrowing capacity on its fully undrawn credit facility gives WPM total liquidity of over $2.5 billion.
Growth Potential
WPM continues to have the premier growth profile among streaming and royalty peers.
Negative Factors
Production Guidance
2025 production guidance misses on gold.
Wheaton Precious Metals (WPM) vs. S&P 500 (SPY)
Market Cap
$46.50B
Dividend Yield0.87%
Average Volume (3M)747.89K
Price to Earnings (P/E)56.0
Beta (1Y)1.02
Revenue Growth30.91%
EPS Growth14.58%
CountryCA
Employees42
SectorBasic Materials
Sector Strength62
IndustryMining
Share Statistics
EPS (TTM)1.83
Shares Outstanding453,677,500
10 Day Avg. Volume897,010
30 Day Avg. Volume747,892
Financial Highlights & Ratios
PEG Ratio3.84
Price to Book (P/B)N/A
Price to Sales (P/S)26.73
Price to Cash Flow (P/CF)32.00
P/FCF Ratio36.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$110.37Price Target Upside7.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Wheaton Precious Metals Business Overview & Revenue Model
Company DescriptionWheaton Precious Metals Corp. is a mining company, which engages in the sale of precious metals and cobalt production. It operates through the following segments: Gold, Silver, Palladium, Cobalt, and Other. It focuses on the following precious metals streams: Salobo, Peñasquito, Antamina, Constancia, Stillwater, San Dimas, Sudhury, Zinkgruvan, Yauliyacu, Neves-Corvo, Pascua-Lama, Rosemont, Voisey's Bay, and others. The company was founded by Peter Derek Barnes on December 17, 2004 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyWheaton Precious Metals generates revenue through its streaming agreements, which provide the company with the right to purchase a specified percentage of a mine's precious metal production at a fixed, reduced cost. This model allows Wheaton to benefit from the sale of these metals at market prices, capturing the spread between the purchase price and the market price. Key factors contributing to its earnings include the strategic selection of streams from high-quality mines, diversification of its portfolio across multiple geographies and operators, and maintaining partnerships with leading mining companies. Additionally, Wheaton's business model significantly reduces its operational risks and capital expenditure compared to traditional mining companies, as it does not own or operate the mines directly.
Wheaton Precious Metals Financial Statement Overview
Summary
Wheaton Precious Metals shows strong profitability with high margins and revenue growth. The balance sheet is robust with low leverage and high equity, though increased capital expenditures have impacted free cash flow.Income Statement
The income statement shows strong profitability with a high gross profit margin of 60.14% and a net profit margin of 50.05% in the TTM period. Revenue has grown by 19.87% from the previous year, indicating positive growth trends. Additionally, EBIT and EBITDA margins are robust at 54.41% and 76.58% respectively, showcasing efficient operations.85
Very Positive
Balance Sheet
The balance sheet is exceptionally strong with a very low debt-to-equity ratio of 0.78%, indicating low leverage. The equity ratio is high at 98.29%, reflecting financial stability. Return on equity is impressive at 8.39%, demonstrating effective use of shareholder funds. The company's assets are primarily financed through equity, minimizing financial risk.90
Very Positive
Cash Flow
Cash flow analysis reveals a decline in free cash flow due to increased capital expenditures, resulting in negative free cash flow for the TTM period. However, the operating cash flow to net income ratio is solid at 1.56, indicating strong cash generation relative to net income. Despite short-term fluctuations, the company maintains positive operating cash flow.75
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.22B | 1.02B | 1.07B | 1.20B | 1.10B | 861.33M | Gross Profit |
| 732.37M | 573.44M | 565.48M | 658.92M | 585.57M | 345.95M | EBIT |
| 662.42M | 505.27M | 511.90M | 600.89M | 519.87M | 291.62M | EBITDA |
| 932.44M | 755.19M | 746.15M | 1.01B | 767.82M | 380.74M | Net Income Common Stockholders |
| 609.43M | 537.64M | 669.13M | 754.88M | 507.80M | 86.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 125.78M | 546.53M | 696.09M | 226.04M | 192.68M | 103.99M | Total Assets |
| 6.48B | 7.03B | 6.76B | 6.30B | 5.96B | 6.28B | Total Debt |
| 1.19B | 6.23M | 1.97M | 2.87M | 198.64M | 878.75M | Net Debt |
| 1.06B | -540.30M | -694.12M | -223.17M | 5.95M | 774.77M | Total Liabilities |
| 1.25B | 45.67M | 42.23M | 46.03M | 242.70M | 952.09M | Stockholders Equity |
| 5.23B | 6.99B | 6.72B | 6.25B | 5.71B | 5.33B |
| Cash Flow | Free Cash Flow | ||||
| -49.35M | 74.94M | 721.76M | 319.18M | 763.62M | 498.41M | Operating Cash Flow |
| 950.34M | 750.81M | 743.42M | 845.14M | 765.44M | 501.62M | Investing Cash Flow |
| -827.37M | -646.65M | -44.30M | -404.22M | 149.65M | 10.63M | Financing Cash Flow |
| -262.83M | -254.24M | -228.89M | -407.61M | -826.90M | -484.19M |
Wheaton Precious Metals Technical Analysis
Positive
102.40
Price Trends
91.75
Positive
89.64
Positive
84.48
Positive
Market Momentum
2.69
Positive
64.71
Neutral
77.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WPM, the sentiment is Positive. The current price of 102.4 is above the 20-day moving average (MA) of 99.41, above the 50-day MA of 91.75, and above the 200-day MA of 84.48, indicating a bullish trend. The MACD of 2.69 indicates Positive momentum. The RSI at 64.71 is Neutral, neither overbought nor oversold. The STOCH value of 77.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WPM.
Wheaton Precious Metals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
TSE:WPM
Wheaton Precious Metals
102.40
42.13
69.91%
FNV
Franco-Nevada
147.15
33.72
29.73%
SAND
Sandstorm Gold
6.31
1.47
30.37%
TSE:ALS
Altius Minerals
24.88
5.08
25.66%
OR
Osisko Gold Royalties
18.97
3.27
20.83%
TSE:RGLD
Red Lake Gold Inc
0.06
-0.01
-14.29%
Wheaton Precious Metals Earnings Call Summary
Earnings Call Date: Nov 7, 2024 | % Change Since: 14.98% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for Wheaton Precious Metals, with record cash flows, strong financial health, and strategic growth initiatives. Despite some operational challenges at certain assets, the company remains on track to achieve its production guidance and continues to expand its portfolio with significant streaming agreements.Highlights
Record Quarterly Operating Cash Flows
Wheaton Precious Metals achieved record quarterly operating cash flows of $254 million, indicating strong financial health and efficient operations.
Strong Production and Guidance On Track
The company has produced approximately 450,000 gold equivalent ounces year-to-date, on track to meet the 2024 production guidance of 550,000 to 620,000 gold equivalent ounces.
Accretive Precious Metal Streaming Agreements
Wheaton announced two significant streaming agreements: an expansion on Rio2's Fenix Project for $100 million and a new $625 million gold stream on Montage's Koné Project.
Strong Financial Position
The balance sheet remains strong with $700 million cash and a $2 billion undrawn revolving credit facility, providing financial flexibility for future investments.
Increased Revenue and Net Earnings
Revenue increased by 38% to $308 million, with net earnings rising to $155 million, despite a $28 million global minimum tax expense.
Future of Mining Challenge
Wheaton launched the inaugural Future of Mining Challenge, awarding $1 million to ventures focused on minimizing environmental impacts and improving industry productivity.
Lowlights
Decrease in Production at Key Assets
Salobo and Constancia experienced production decreases of approximately 9% and 45% in gold and silver respectively, due to lower grades and operational challenges.
Stillwater Operations Impacted
Stillwater West operations placed into care and maintenance due to low platinum and palladium prices, potentially reducing 2025 production by 40% to 45%.
Company Guidance
During the Wheaton Precious Metals Q3 2024 earnings call, the company provided a comprehensive overview of its financial and operational performance, highlighting several key metrics. Wheaton reported record quarterly operating cash flows of $254 million, driven by strong commodity prices and robust production levels. The company is on track to meet its 2024 production guidance of 550,000 to 620,000 gold equivalent ounces, having produced approximately 450,000 ounces year-to-date. The third quarter saw sales volumes of 123,000 gold equivalent ounces, marking a 10% increase compared to the prior year. Revenue for the quarter rose by 38% to $308 million, with 61% attributable to gold and 37% to silver. The company's balance sheet remains strong, with $700 million in cash and a $2 billion undrawn revolving credit facility. Wheaton also declared a quarterly dividend of $0.155 per share. Additionally, the company announced two new precious metal streaming agreements, including a significant $625 million gold stream on Montage’s Koné Project, further enhancing its growth trajectory.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.