WPM: Rising Gold And Silver Prices Will Drive Long-Term Upside

Analysts have nudged their price targets on Wheaton Precious Metals modestly higher, with incremental increases such as BofA's move to $133 and Scotiabank's lift to $128. These adjustments reflect expectations of stronger precious metals pricing and resilient demand despite a mixed global macro backdrop.

Analyst Commentary

Street research remains broadly constructive on Wheaton Precious Metals, with a series of upward price target revisions across currencies and geographies. These moves signal growing confidence in the company’s leverage to rising precious metals prices and its ability to deploy capital into value accretive opportunities.

Most updates emphasize that while the macro backdrop for commodities is mixed, Wheaton’s streaming model and diversified asset base position it to benefit from higher gold and silver price forecasts and ongoing sector consolidation.

Bullish Takeaways

• Bullish analysts highlight Wheaton’s strong sensitivity to higher gold and silver prices, noting that upgraded long term price decks support higher valuation multiples and justify recent target increases.
• Several notes point to robust capital returns and sustained M&A momentum in the precious metals space, arguing that Wheaton’s balance sheet and streaming expertise position it well to capture accretive growth.
• Analysts see recent commitments to new financing arrangements and streams as reinforcing Wheaton’s growth pipeline, supporting expectations for rising cash flow and net asset value over the medium term.
• Updates indicate that concerns about a softer operating patch have not materialized, with outlooks for key metals like gold and copper remaining favorable, helping underpin earnings resilience and target hikes.

Bearish Takeaways

• Bearish analysts and more neutral voices caution that a challenging macro backdrop, particularly slower commodity demand in China, could temper the pace of metals price appreciation that current valuations are baking in.
• Some research flags that after a strong rally in precious metals, market expectations for future price levels and streaming margins may be elevated, leaving less room for execution missteps or project delays.
• There is also a note of prudence around the competitive landscape for new streams and royalties, with the risk that aggressive bidding for assets could compress returns and limit upside to current price targets.
• A handful of views emphasize that while fundamentals are solid, the stock’s recent rerating means upside may increasingly depend on continued delivery of high quality deals and disciplined capital allocation.

What's in the News

• Completed a $300 million gold stream with Carcetti Capital, supporting its acquisition of the Hemlo Mine from Barrick and delivering immediate production and cash flow to Wheaton (Key Developments)
• Secured long term gold purchase rights at Hemlo, including tiered streaming percentages and production based adjustments that extend for the life of the 14 year mine (Key Developments)
• Boosted mineral reserves and resources, with Hemlo adding an estimated 0.19 Moz of Proven and Probable gold reserves plus incremental Measured, Indicated, and Inferred resources (Key Developments)
• Obtained a right of first refusal on future Hemlo precious metal streams and first priority security over substantially all of Hemlo Mining Corp.’s assets, shared with acquisition lenders (Key Developments)
• Entered a definitive precious metals purchase agreement for the Spring Valley Project in Nevada through WPMI, backing early site works ahead of full construction in 2026 and targeted first gold in 2028 (Key Developments)

Valuation Changes

• Fair Value Estimate has edged down marginally to CA$182.74 from CA$182.74, effectively unchanged and indicating a stable intrinsic value assessment.
• Discount Rate has risen slightly to 7.08 percent from 7.04 percent, reflecting a modestly higher required return for valuing future cash flows.
• Revenue Growth has increased slightly to 15.73 percent from 15.52 percent, signaling a small upgrade to medium term growth expectations.
• Net Profit Margin has eased slightly to 59.70 percent from 60.02 percent, implying a minor reduction in projected profitability levels.
• Future P/E has ticked up modestly to 43.21x from 42.82x, suggesting a slightly higher valuation multiple being applied to forward earnings.