Renewable Energy Demand And Safe-Haven Metals Will Fuel Transformation

Key Takeaways

• Exceptional operational momentum and structural margin advantages suggest Wheaton could materially outperform consensus expectations for growth, earnings, and dividends.
  
• Strong cash reserves and exposure to decarbonization metals position Wheaton to capture market share and benefit from rising industrial and investor demand.
  
• Structural shifts in global demand, competition from digital assets, and portfolio concentration expose Wheaton to revenue volatility, margin compression, and growth constraints despite stable production.

Catalysts

Sells precious metals in North America, Europe, Africa, and South America.

• Analysts broadly agree that Wheaton's production is on track to grow by over 40% to 870,000 gold equivalent ounces by 2029, but current operational momentum, consistent quarterly outperformance (such as Salobo's 16% quarterly gold production increase), and the front-loaded ramp-up of new projects indicate Wheaton may exceed this target, potentially supporting higher revenue and cash flow growth than projected.
  
• Analyst consensus expects robust margin expansion from scale and leverage to higher prices, but today's sustained record margins-where gross profit increased 86% year over year, outpacing commodity price increases-suggest a persistent structural advantage that could lead to significantly higher-than-expected long-term net earnings and amplified dividend growth.
  
• The record high cash balance of $1.1 billion plus undrawn $2 billion credit is poised to enable a step-change in growth, as Wheaton is increasingly being sought out for larger, high-quality streaming deals and is positioned to capture expanded market share while competitors face capital constraints, boosting both revenue and future market leadership.
  
• Wheaton's portfolio is uniquely levered to the accelerating global buildout of renewable energy, with several new mine streams rich in silver and strategic metals vital for decarbonization, positioning the company to benefit disproportionately from increasing industrial demand and structurally higher realized prices, supporting both topline growth and margin uplift.
  
• Increasing global inflation, central bank gold buying, and heightened geopolitical risk are driving a pronounced and sustained investor rotation into physical gold and silver, directly resulting in higher realized prices and demand for streaming deals, and thereby enhancing Wheaton's future revenue, cash flow, and valuation multiples beyond what current consensus models reflect.

Wheaton Precious Metals Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Wheaton Precious Metals compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Wheaton Precious Metals's revenue will grow by 17.7% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 42.5% today to 58.7% in 3 years time.
• The bullish analysts expect earnings to reach $1.4 billion (and earnings per share of $3.12) by about July 2028, up from $619.1 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 53.2x on those 2028 earnings, down from 70.2x today. This future PE is greater than the current PE for the CA Metals and Mining industry at 17.5x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.56%, as per the Simply Wall St company report.

Wheaton Precious Metals Future Earnings Per Share Growth

Risks

• The accelerated global transition to renewable energy and broader decarbonization may reduce long-term investment demand for precious metals like gold and silver, potentially leading to lower commodity prices and negatively affecting Wheaton's revenue and top-line growth despite healthy production forecasts.
  
• Prolonged periods of higher real interest rates and tighter monetary conditions worldwide could erode the appeal of non-yielding assets such as gold and silver, diminishing investment demand and putting downward pressure on Wheaton's revenue growth and valuation multiples over the long term.
  
• A growing shift by savers and investors toward digital assets and cryptocurrencies as alternative stores of value may limit future capital flows into physical precious metals, restricting Wheaton's long-term revenue outlook even as its portfolio expands.
  
• Wheaton's portfolio remains concentrated in a limited number of key streaming assets, such as Salobo and Antamina; any operational issues, lower grades, depletion events (such as Pampacancha expected to be depleted by early 2025), or renegotiations at these mines could lead to pronounced revenue volatility or decline in net earnings.
  
• Discoveries of new high-quality streaming opportunities may decline as mining companies increasingly opt for in-house financing over external streaming, while heightened environmental and political risks in host jurisdictions may lead to project delays, higher compliance costs, and the risk of contract amendments, all factors that can compress Wheaton's net margins and limit its ability to secure and grow future revenue streams.

Valuation

• The assumed bullish price target for Wheaton Precious Metals is CA$183.62, which represents two standard deviations above the consensus price target of CA$143.2. This valuation is based on what can be assumed as the expectations of Wheaton Precious Metals's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$190.22, and the most bearish reporting a price target of just CA$125.55.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $2.4 billion, earnings will come to $1.4 billion, and it would be trading on a PE ratio of 53.2x, assuming you use a discount rate of 6.6%.
• Given the current share price of CA$130.19, the bullish analyst price target of CA$183.62 is 29.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.