Wheaton Precious Metals is gearing up to release its Q1 2024 results, with expectations of strong revenue growth driven by higher gold prices during the quarter. The company is estimated to report revenue of $285 million, a 33% increase from the previous year, and earnings of $0.30 per share, slightly ahead of consensus estimates. Production was impacted in 2023 due to various factors, including a strike at the Peñasquito mine in Mexico. However, the company expects production to improve in 2024, with estimates ranging from 550,000 to 620,000 gold equivalent ounces. This is driven by stronger production from Peñasquito and Voisey’s Bay, although lower output from the Salobo mine may offset some of these gains. With gold prices trading near all-time highs, this could help increase price realizations for the company.
Despite experiencing fluctuations in stock performance over the past few years, Wheaton Precious Metals has shown strong gains overall, outperforming the S&P 500 in terms of returns. The company’s stock price has increased by 40% since early 2021, reaching around $55. However, performance has not been consistent, with returns of 3% in 2021, -9% in 2022, and 26% in 2023. Compared to the S&P 500, WPM underperformed in 2021 but has shown better performance in subsequent years. The Trefis High Quality Portfolio, which includes a diverse range of stocks, has consistently outperformed the S&P 500 over the same period. Given the current economic environment with high oil prices and elevated interest rates, there are concerns about whether WPM will continue to outperform the market or face challenges in the near future.
Predictions for precious metals prices remain positive, driven by easing inflation, global economic growth concerns, and potential interest rate cuts by the Fed in 2024. While near-term production declines could impact Wheaton’s performance, the company anticipates an increase in overall production volumes in the long term. By 2028, Wheaton aims to achieve an average production of 800,000 gold equivalent ounces, further increasing to over 850,000 GEOs from 2029 to 2033. Despite these growth prospects, the stock currently trades at a high valuation of 48x consensus 2024 earnings, leading some analysts to believe it may be overvalued. As the company prepares to release its earnings report, a reassessment of Wheaton Precious Metals’ valuation will be conducted.
Investors may find opportunities to invest in Trefis Market Beating Portfolios, which have consistently performed well compared to the S&P 500. These portfolios offer a collection of stocks with better returns and less risk than the benchmark index, providing a more stable investment option. With ongoing uncertainty in the macroeconomic environment, including high oil prices and interest rate fluctuations, it remains to be seen whether Wheaton Precious Metals will continue its trend of outperforming the market or face challenges in the coming months. Following the upcoming earnings release, analysts will closely monitor the company’s results and make adjustments to their price estimates for WPM based on the latest information.
