Wheaton Precious Metals

US: WPM

CA$15903.6m market cap

CA$35.69 last close

Wheaton Precious Metals is the pre-eminent ostensibly precious metals streaming company, with c 30 high quality, precious metals streaming and early deposit agreements relating to assets in Mexico, Peru, Canada, Brazil, Chile, Argentina, Sweden, Greece, Portugal and the US.

Investment summary

WPM’s Q119 results were closely in line with our prior expectations, with the exception of a large gold inventory drawdown, which offset a silver inventory increase to result in net earnings that were within 3.5% of our prior forecasts. Probably more importantly, in December, WPM reached a settlement with the Canada Revenue Agency to the effect that foreign income on earnings generated by WPM’s international subsidiaries will remain exempt from tax in Canada in the future.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 843.2 564.7 277.4 63.0 43.3 21.4
2018A 794.0 496.6 203.1 48.0 56.8 23.3
2019E 845.7 532.2 221.2 50.0 54.6 22.5
2020E 1140.3 828.0 521.8 117.0 23.3 14.7
Last updated on 25/07/2019
Industry outlook

Assuming no purchases of additional streams, we forecast a value for WPM of US$33.41/share (C$45.03/share) in FY20. Concerns that operations at Salobo could be affected by Vale’s iron ore tailings dams problems appear without foundation. In the meantime, WPM is trading on near-term financial ratios that are cheaper than its royalty/streaming peers on 91% of common financial measures and the miners themselves on 41% of the same measures, despite being associated with materially less operating and cost risk.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 860.3
Forecast gearing ratio (%) 16
Price performance
%
1m
3m
12m
Actual 10.2 23.8 27.3
Relative* 9.4 24.4 26.8
52-week high/low C$36.0/C$20.1
*% relative to local index
Key management
Randy V. J. Smallwood CEO
Gary D. Brown CFO
Emma Murray Director of Investor Relations
Patrick Drouin Director of Investor Relations

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