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Gold prices recently surged past US$4,000 per ounce, reaching record highs and fueling significant earnings growth for Wheaton Precious Metals due to its unique streaming model.
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Wheaton Precious Metals’ ability to secure long-term streaming agreements at discounted prices has positioned it to benefit more than traditional miners when gold and silver prices spike.
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We’ll examine how Wheaton Precious Metals’ earnings momentum and streaming model bolster its investment narrative amid record gold prices.
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To be a shareholder in Wheaton Precious Metals, you need to believe that gold and silver prices will remain elevated and that the company’s long-term streaming agreements will continue to deliver outsized returns relative to traditional mining peers. The recent record run in gold prices is a powerful short-term catalyst, driving strong earnings momentum, but the biggest risk remains Wheaton’s ability to secure large, accretive new streams in a market that’s becoming more competitive. For now, this gold price surge materially strengthens the company’s near-term growth story.
The surge in quarterly earnings, up 138% year over year, is arguably the most relevant announcement, as it directly reflects Wheaton’s leverage to higher commodity prices and the effectiveness of its streaming model. When prices spike, Wheaton’s margins can expand more rapidly than traditional miners, translating into both higher profits and recent dividend increases. Despite this momentum, investors should remember that these record results are heavily dependent on continued strength in precious metal prices…
Read the full narrative on Wheaton Precious Metals (it’s free!)
Wheaton Precious Metals is expected to achieve $2.2 billion in revenue and $1.1 billion in earnings by 2028. This outlook is based on an assumed annual revenue growth rate of 9.2% and an earnings increase of $311 million from the current level of $789 million.
Uncover how Wheaton Precious Metals’ forecasts yield a CA$174.47 fair value, a 9% upside to its current price.
Seven fair value estimates from the Simply Wall St Community span a wide range, from US$65.96 to US$186.39. While some see significant upside, the risk of a shrinking pipeline of large, high-quality streaming deals could limit Wheaton’s earnings growth if competition continues to intensify, making it essential to review these diverse opinions before you make up your mind.