Edison Investment Research Limited
Edison issues outlook on Wheaton Precious Metals (WPM)
23-March-2020 / 13:03 GMT/BST
London, UK, 23 March 2020
Edison issues outlook on Wheaton Precious Metals (WPM)
Attributable production of gold at Wheaton Precious Metals (WPM) reached a
record in FY19, breaching the 400koz level for the first time ever. Record
production begat record sales, although sales struggled to keep pace with
production and, as a result, there was a slightly uncharacteristic (for the
fourth quarter) increase in the number of ounces of metal produced but not
yet delivered to WPM from its underlying streaming assets. From a financial
perspective however, underlying net earnings during the quarter were within
US$1m of our prior forecasts, auguring well for FY20 in terms of both EPS
and DPS.
We have honed our EPS forecasts to 65c for FY20 and to 113c for FY21 in the
wake of the recent turmoil in the precious metals markets. Assuming no
material purchases of additional streams (which we think unlikely), we
forecast a value per share for WPM of US$33.38, or C$48.47, in FY21. This
valuation excludes the value of 20.2m shares in First Majestic held by WPM,
with an immediate value of C$150.2m, or US$0.23 per WPM share. In the
meantime, WPM's shares are trading on near-term financial ratios that are
cheaper than those of its royalty/streaming 'peers' in at least 54% of
financial measures considered in Exhibit 11, and the miners themselves in at
least 26% of the same measures, despite being associated with materially
less operating and cost risk.
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1004123 23-March-2020
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(END) Dow Jones Newswires
March 23, 2020 09:04 ET (13:04 GMT)
