Berenberg Raises Price Target on Wheaton Precious Metals to $73 From $66, Keeps Buy Rating

Wheaton Precious Metals WPM reported adjusted earnings per share of 34 cents in third-quarter 2024, in line with the Zacks Consensus Estimate. The bottom line increased 32.7% year over year.

Including one-time items, WPM reported earnings per share of 34 cents compared with earnings of 26 cents in the third quarter of 2023.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

WPM’s Q3 Revenues Gain on Higher Prices

Wheaton Precious generated revenues of around $308 million in the quarter, which rose 38.1% on a year-over-year basis. The year-over-year increase was attributed to higher average realized gold equivalent price and higher gold equivalent ounces (GEOs) sold in the quarter. The top line, however, missed the Zacks Consensus Estimate of $325 million.

Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise

Wheaton Precious Metals Corp. price-consensus-eps-surprise-chart | Wheaton Precious Metals Corp. Quote

In third-quarter 2024, the average realized gold price was $2,491 per ounce. The figure was 28.1% higher than the year-ago quarter. Silver prices were $29.71 per ounce in the reported quarter, up 25.2% year over year. Palladium prices were $969 per ounce, down 23% from $1,251 per ounce in the prior-year quarter. Cobalt prices fell 23.2% year over year to $10.65 per pound.

Wheaton Precious’ Q3 GEOs Rise 10%

Attributable gold production in the quarter was 87,199 ounces, down 17% from the prior-year quarter’s output of 105,027 ounces. The figure beat our gold production projection of 77,539 ounces for the quarter.

Attributable silver production rose 34.1% year over year to 4,554 ounces in the quarter. Production lagged our silver production estimate of 4,674 ounces.

The company sold 122,715 GEOs in the quarter, up 9.6% year over year. It produced 144,164 GEOs compared with 147,278 GEOs in the third quarter of 2023.

WPM’s Margins Rise Y/Y in Q3

The total cost of sales rose 15.2% year over year to around $111 million in the reported quarter. The gross profit was up 55.6% to $197 million. The gross margin was 64% in the reported quarter compared with 56.9% in the prior-year quarter.

General and administrative expenses increased 10.2% year over year to $9.5 million. Earnings from operations in the quarter under review was $176 million, a 56.8% increase from $112 million in the third quarter of 2023.

Average cash costs in the third quarter of 2024 were $437 per GEO, down from $445 in the year-ago quarter. The cash operating margin increased 34% year over year to $2,075 per GEO sold due to a higher realized price per ounce.

Wheaton Precious’ Q3 Financial Position

Wheaton Precious had around $694 million of cash in hand at the end of the third quarter of 2024 compared with $547 million at the end of 2023. It reported an operating cash flow of $254 million in the quarter under review compared with $171 million in the prior-year quarter.

WPM had a debt-free balance sheet as of Sept. 30, 2024. The company has a $2-billion undrawn revolving credit facility.

WPM’s 2024 Outlook

Wheaton Precious projects an attributable production of 550,000-620,000 GEOs. Gold production is expected to be 325,000-370,000 ounces. Silver production is projected between 18.5 million and 20.5 million ounces. The production of other metals is anticipated to be 12,000-15,000 GEOs. WPM produced 12,275 GEOs of other metals in 2023.

Wheaton Precious’ Price Performance

WPM shares have gained 51.8% in the past year compared with the industry’s 6% growth.

WPM’s Zacks Rank

Wheaton Precious currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wheaton Precious’ Peer Performances

Cleveland-Cliffs Inc.’s CLF third-quarter 2024 adjusted loss was 33 cents per share. This compared unfavorably with adjusted earnings of 54 cents in the prior-year quarter. The loss per share was wider than the Zacks Consensus Estimate of a loss of 31 cents.

CLF’s revenues fell 18.5% year over year to $4,569 million in the quarter. The top line missed the Zacks Consensus Estimate of $4,754.4 million.

Reliance, Inc. RS reported third quarter 2024 earnings of $3.64 per share , down from $5.00 a year ago. Its earnings lagged the Zacks Consensus Estimate of $3.69.

RS recorded net sales of $3,420.3 million, down around 6% year over year. The top line beat the Zacks Consensus Estimate of $3,409.3 million. RS benefited from higher shipments amid headwinds from weaker metals pricing in the quarter.

Teck Resources Ltd TECK posted third-quarter 2024 earnings of 44 cents per share, beating the Zacks Consensus Estimate of 36 cents. This compared unfavorably to earnings of 57 cents a year ago.

TECK’s revenues were $2.1 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate of $2.2 billion. The company had reported revenues of $2.7 billion in the year-ago quarter.

Zacks Investment Research

For the quarter ended September 2024, Wheaton Precious Metals Corp. (WPM) reported revenue of $308.25 million, up 38.1% over the same period last year. EPS came in at $0.34, compared to $0.27 in the year-ago quarter.

The reported revenue represents a surprise of -5.03% over the Zacks Consensus Estimate of $324.57 million. With the consensus EPS estimate being $0.34, the company has not delivered EPS surprise.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Wheaton Precious Metals performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Ounces Sold - Silver: 3,875 Oz versus 4,194.1 Oz estimated by eight analysts on average.
• Ounces Produced - Palladium - Stillwater: 4.03 Oz versus the eight-analyst average estimate of 4.29 Oz.
• Ounces Produced - Total Gold: 87.2 Oz compared to the 80.78 Oz average estimate based on eight analysts.
• Ounces Produced - Total Silver: 4,554 Oz versus 4,843.25 Oz estimated by eight analysts on average.
• Revenues- Silver sales: $115.15 million compared to the $125.38 million average estimate based on 11 analysts. The reported number represents a change of +63.6% year over year.
• Revenues- Palladium sales: $3.64 million versus $3.85 million estimated by 11 analysts on average. Compared to the year-ago quarter, this number represents a -31.3% change.
• Revenues- Gold sales: $188.52 million versus the 10-analyst average estimate of $192.49 million. The reported number represents a year-over-year change of +30.3%.
• Revenues- Cobalt sales: $0.94 million compared to the $3.49 million average estimate based on 10 analysts. The reported number represents a change of -65.9% year over year.
• Revenues- Gold - Sudbury: $6.29 million versus $14.33 million estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a -33.3% change.
• Revenues- Gold - Salobo: $144.66 million versus the eight-analyst average estimate of $133.68 million. The reported number represents a year-over-year change of +67.4%.
• Revenues- Gold - San Dimas: $17.48 million versus the eight-analyst average estimate of $20.50 million. The reported number represents a year-over-year change of -7.2%.
• Revenues- Gold - Constancia: $12.91 million compared to the $19.44 million average estimate based on seven analysts. The reported number represents a change of -46.4% year over year.

View all Key Company Metrics for Wheaton Precious Metals here>>>

Shares of Wheaton Precious Metals have returned +5.5% over the past month versus the Zacks S&P 500 composite's +3.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Zacks Investment Research

Wheaton Precious Metals Corp. (WPM) came out with quarterly earnings of $0.34 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this company would post earnings of $0.29 per share when it actually produced earnings of $0.33, delivering a surprise of 13.79%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Wheaton Precious Metals, which belongs to the Zacks Mining - Miscellaneous industry, posted revenues of $308.25 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 5.03%. This compares to year-ago revenues of $223.14 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Wheaton Precious Metals shares have added about 27.2% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for Wheaton Precious Metals?

While Wheaton Precious Metals has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Wheaton Precious Metals: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.42 on $356.83 million in revenues for the coming quarter and $1.44 on $1.29 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Mining - Miscellaneous is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Piedmont Lithium Inc. (PLL), has yet to report results for the quarter ended September 2024. The results are expected to be released on November 12.

This company is expected to post quarterly loss of $0.46 per share in its upcoming report, which represents a year-over-year change of -152.3%. The consensus EPS estimate for the quarter has been revised 460% lower over the last 30 days to the current level.

Piedmont Lithium Inc.'s revenues are expected to be $32.91 million, down 30.2% from the year-ago quarter.

Zacks Investment Research