Wheaton Precious Metals is expected to release its Q1 2024 results in early May, with revenue estimated to be around $285 million, a 33% increase from the previous year. Earnings are projected to be $0.30 per share, slightly ahead of consensus estimates. The company’s production in 2023 was impacted by various factors, including a strike at the Peñasquito mine in Mexico. However, production is expected to improve in 2024, with estimates of 550,000 to 620,000 GEO driven by stronger production at the Peñasquito mine and Voisey’s Bay. Despite lower output expected at the Salobo mine, the rising prices of precious metals, particularly gold, could help boost revenue.
Wheaton Precious Metals stock has shown strong gains in recent years, increasing by 40% from early 2021 to around $55. However, the stock’s performance has been inconsistent, with returns of 3% in 2021, -9% in 2022, and 26% in 2023. Compared to the S&P 500, WPM underperformed in 2021 but outperformed in 2023. In a challenging macroeconomic environment with high oil prices and elevated interest rates, it remains to be seen whether WPM can continue to outperform the market. Precious metals prices are expected to remain strong due to easing inflation, concerns about global economic growth, and potential interest rate cuts by the Fed in 2024.
Despite near-term production declines, Wheaton Precious Metals is aiming to increase its overall production volumes in the long run. The company is guiding for an average production of 800,000 GEOs by 2028 and over 850,000 GEOs from 2029 to 2033, representing a 35% increase from 2023. However, the stock is currently trading at a high multiple of 48x consensus 2024 earnings, leading to concerns about its valuation. Trefis estimates the valuation of Wheaton Precious Metals at $40 per share, below the current market price. The company’s valuation will be reassessed following the earnings release.
Trefis has a High Quality Portfolio that has consistently outperformed the S&P 500 over the past few years, providing better returns with less risk. In the current uncertain economic environment, it remains to be seen whether Wheaton Precious Metals can maintain its performance and continue to outperform the market. The company’s revenue streams and business model will be closely analyzed to determine its potential for future growth and profitability. Investors are advised to consider Trefis Market Beating Portfolios for investment opportunities based on Trefis price estimates.