Wheaton Precious Metals (TSX:WPM): How the Hemlo Gold Stream Deal Impacts Valuation and Future Growth Prospects

Wheaton Precious Metals (TSX:WPM) has completed a $300 million gold stream agreement with Hemlo Mining Corp, formerly Carcetti Capital. This agreement unlocks immediate production upside, new cash flow, and an increase in the company’s mineral reserves.

See our latest analysis for Wheaton Precious Metals.

This strategic move appears to have caught investors’ attention, as momentum in Wheaton Precious Metals’ share price has built sharply in recent months. The company has seen a robust 13.3% 1-month share price return and an impressive 83.4% gain year-to-date, while its 1-year total shareholder return stands at 79%. The latest production agreement, combined with this upward trajectory, positions Wheaton as one of the best-performing names in the sector. This trend suggests optimism not only for near-term growth but also for the company’s long-term prospects.

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But with shares already notching spectacular gains and optimism running high, the big question is whether Wheaton Precious Metals is currently undervalued or if the market has already priced in all of its expected future growth. Is there still a buying opportunity, or has the window closed?

Most Popular Narrative: 16% Undervalued

With analysts placing Wheaton Precious Metals’ fair value at CA$182.74 a share, there is a clear gap to the last close at CA$153.47. This narrative sets an optimistic tone for significant upside if forecast assumptions play out as expected.

Robust pipeline of new and expanding streaming agreements, including the ramp-up at Salobo III, commercial production at Blackwater, accelerated Phase 2/3 expansions at Blackwater, and new streams like Goose and Platreef, positions Wheaton for approximately 40% organic production growth by 2029, directly supporting higher future revenue and earnings growth.

Read the complete narrative.

Want a window into what is fueling this ambitious target? Tucked inside the narrative is a bold roadmap of projected growth and profitability metrics, culminating in a future earnings multiple more akin to a high-growth disruptor than a traditional miner. Which aggressive assumptions are underpinning the belief in major value creation? Click through and see if you agree with the playbook driving the analysts’ price target.

Result: Fair Value of $182.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition for high-quality streaming deals and jurisdictional risks in key mining regions could challenge Wheaton’s positive outlook and future growth expectations.

Find out about the key risks to this Wheaton Precious Metals narrative.

Another View: What Do Market Multiples Say?

Looking at Wheaton Precious Metals through the lens of price-to-earnings, the company trades at a lofty 49.8x earnings. This is far above the Canadian Metals and Mining industry average of 21.1x and the peer average of 28.1x, as well as the fair ratio of 22.9x calculated by regression analysis. The large gap suggests investors are already betting on outsized future growth, but it also exposes the stock to potential valuation risk if these high expectations are not met. Does this premium make sense, or does it set the stage for disappointment if momentum fades?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Wheaton Precious Metals Narrative

If you see the story differently or want to explore the raw numbers firsthand, you can easily construct your own perspective on Wheaton Precious Metals in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Wheaton Precious Metals.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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