Wheaton Precious Metals Corp. (TSE:WPM) shareholders are probably feeling a little disappointed, since its shares fell 9.5% to CA$58.22 in the week after its latest third-quarter results. It was a workmanlike result, with revenues of US$307m coming in 3.5% ahead of expectations, and statutory earnings per share of US$0.33, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wheaton Precious Metals after the latest results.
Following the latest results, Wheaton Precious Metals' 13 analysts are now forecasting revenues of US$1.41b in 2021. This would be a substantial 37% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 72% to US$1.65. In the lead-up to this report, the analysts had been modelling revenues of US$1.42b and earnings per share (EPS) of US$1.65 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$58.10, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Wheaton Precious Metals, with the most bullish analyst valuing it at US$90.61 and the most bearish at US$53.56 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Wheaton Precious Metals' rate of growth is expected to accelerate meaningfully, with the forecast 37% revenue growth noticeably faster than its historical growth of 5.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wheaton Precious Metals to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Wheaton Precious Metals going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Wheaton Precious Metals .
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