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Trefis Has A Price Estimate Of $32 For WPM's Stock
Trefis Stock Price Estimate
Wheaton Precious Metals Corporation is the world's largest silver streaming company, with fourteen silver purchase agreements.WPM has also increased its share of gold production with new purchase agreements. The New San Dimas agreement has taken WPM's gold revenues well beyond its silver sales.Palladium as a new addition to the company's business in 2018, offers product diversification benefits.
We arrive at the stock price estimate for WPM as:
Stock Price = (Total Revenue x Net Income Margin / Shares Outstanding) x P/E Multiple
Trefis Stock Price Estimate
Net Income Margin
No of Shares
Wheaton Precious Metals Revenues: How Does Wheaton Precious Metals Make Money?
What Is The Importance Of Gold Mining In Wheaton Precious Metals' Business?
Silver Prices: 10 Year Price Performance And Production-Demand-GDP Analysis
#1.Estimating WPM's Total Revenues:
Total Revenues have decreased from $892 million in 2016 to $794 million in 2018, however it is expected to increase to $881 million in 2019 and further to $955 million in 2020
Our Interactive Dashboard Analysis, Wheaton Precious Metals Revenues: How Does WPM Make Money?, Provides An In Depth View Of The Company's Revenues.
Total revenue is expected to increase by 11% to $881 million in 2019 and further by 8.4% to reach over $955 million by 2020.Higher revenue is likely to be driven by healthy growth in the gold and palladium division, partially offset by drop in silver sales.
Total Revenue (a+b+c)
Gold Revenue (a)
Silver Revenue (b)
Palladium Revenue (c)
#2. Deriving WPM's Net Income:
Net Income increased from $195 million in 2016 to $427 million in 2018. The sharp rise in 2018 was driven by one-time tax benefits realized. We expect it to decrease to $238 million in 2019, with a marginal recovery to $315 million in 2020.
This fall in net income will likely be led by lower margins partially offset by elevated revenue level
Net income margin is expected to decrease from 53.8% in 2018 to about 27% in 2019, in the absence of large one-time gains during the year (unlike in 2018) and higher interest burden and impairment charge, partially offset by rising production.Margin is expected to increase to 33% in 2020, driven by increase in production and higher revenues.
Net Income (A x B)
Total Revenue (A)
Net Income Margin (B)
#3. Determining WPM's EPS:
EPS has grown from $0.44 in 2016 to $0.96 in 2018. We estimate it to be $0.54 and $0.71 in 2019 and 2020, respectively
Lower EPS in 2020 and 2021 can be attributed to lower Net Income and an almost stable share count.
EPS (A / B)
Net Income (A)
No of Shares (B)
Estimating WPM's Share Price:
Our Price Estimate of $32 For WPM's Stock is based on our Detailed Valuation Model, and implies a 45.1x P/E Multiple on expected 2020 EPS of $0.71
Trefis Stock Price Estimate (A * B)
P/E Ratio (B)
Comparing WPM's Historical P/E Multiple With That of Its Peers
P/E Multiples are based on Share Price at the end of December 2019, and reported (or expected) Adjusted Earnings for the full year
Note: Barrick Gold's 2018 P/E is not defined due to loss reported for the year
WPM P/E Multiple
Freeport-McMoRan P/E Multiple
Newmont-Goldcorp P/E Multiple
Barrick Gold P/E Multiple
Our Complete Set Of Analyses On Wheaton Precious Metals
DISAGREE WITH OUR FORECASTS? CREATE YOUR OWN
1. How to save your forecasts:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can see how well you forecast the company's performance at the end of each period and compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.