Wheaton Precious Metals Hits 52-Week High: What's Driving the Stock?
Shares of Wheaton Precious Metals Corp. WPM scaled a new 52-week high of $64.27 on Wednesday before ending the session slightly lower at $61.30. The increase was fueled by rising gold prices.
Wheaton Precious Metals currently has a market capitalization of $28 billion and a Zacks Rank #3 (Hold).
What’s Aiding Wheaton Precious Metals?
Promising Long-term Production Guidance: The company expects production to increase 40% over the next five years and be more than 800,000 GEOs by 2028.
This will primarily be driven by growth from operating assets, including Salobo, Antamina, Peñasquito, Voisey's Bay and Marmato. Development projects that are in construction and/or permitted, including Platreef, Blackwater, Goose, Mineral Park, Fenix and Santo Domingo. Pre-development projects, including Curipamba, Marathon and Copper World, for which production is anticipated toward the latter end of the five-year forecast period.
From 2029 to 2033, attributable production is expected to average more than 850,000 GEOs. This factors in additional production from pre-development assets, including the Cangrejos, Kudz ze Kayah, Curraghinalt, Victor, Toroparu and Kutcho projects, in addition to the Brewery Creek, Black Pine and Mt. Todd royalties.
Solid Balance Sheet: As of June 30, 2024, Wheaton Precious Metals was debt-free. The company earlier extended its existing undrawn $2-billion revolving credit facility, which is expected to mature on June 22, 2028. The company had $540 million of cash on hand at the end of the second quarter of 2024.
Wheaton Precious Metals’ cash operating margins are among the highest in the mining industry, enabling it to pay a competitive dividend and continue to grow through accretive acquisitions.
Strategic Acquisitions: WPM continues to add streams, which have brought immediate production, as well as medium and longer-term growth, to its robust portfolio of assets.
With record eight acquisitions totaling just more than $1 billion in commitments in 2023, Wheaton Precious Metals strengthened its growth plan, increasing production and sustaining its long-term growth forecast. The company is continuing its acquisitions in 2024. On Feb. 20, 2024, it acquired a 1.5% Net Smelter Royalty from Integra Resources Corporation for the DeLamar and Florida Mountain projects.
YTD Rally in Gold Prices: Gold prices have gained 25% so far in 2024, surpassing the performances of most major asset classes. Several factors have contributed to this solid performance in 2024, including increased geopolitical tensions, the potential for monetary policy easing and continuous purchasing by central banks. The yellow metal touched an all-time high of $2,600 an ounce on Wednesday, as the Federal Reserve announced an aggressive interest cut of half a percentage point. Gold prices are currently around $2,591 an ounce. Silver prices have also gained and are presently around $31 per ounce, yielding 26.8% year-to-date growth.
Analysts expect this momentum to continue and are projecting gold prices to scale to around $3,000 an ounce by 2025, backed by solid demand amid limited supply prospects.
WPM Stock Outperforms Industry’s Decline
WPM shares have gained 38.8% in the past year against the industry’s fall of 4.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, IAMGOLD Corporation IAG and Eldorado Gold Corporation EGO. CRS, IAG and EGO sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for 2025 earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 106.1% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for 2024 earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG shares have gained 135.7% in a year.
The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for 2024 earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 84.7% in a year.
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Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report