What to Expect From Wheaton Precious Metals’ Fourth Quarter Results

by Trefis Team
Wheaton Precious Metals
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Wheaton Precious Metals (NYSE: WPM) will report its fourth-quarter and full-year 2017 results on 21st March 2018 and conduct a conference call with analysts the following day. We expect the company to report revenue of ~$862 mil, ~3% lower than 2016 figures due to a lower sales volume of both silver & gold. Based on our 2017 and 2018 revenue estimates, we have a price forecast of $23 for the company which is further elaborated in our interactive dashboard.

Revenue is most likely to be negatively impacted by a lower production output from its silver streaming operations. Wheaton’s total silver output for the 9 months ended 2017 was 1.4 million ounces lower compared to the same period the previous year. The majority of this decline was a resultant impact of various operational issues at the company’s San Dimas mines, which is a significant contributor to its silver revenues. Additionally, the company’s gold output for 9 months ended October ’17 was only 8,400 ounces higher compared to the same period last year. This was despite the company’s 25% increase in the stake of Vale’s Salobo mines. Increase in gold output was offset by a fall in output from the company’s Sudbury mines due to an adverse impact of a scheduled rebuild and expansion in capacity throughout 2017. Gold output was further impacted by the company’s reduced share of the gold production at the 777 mine from 100% to 50% effective January 1, 2017.

Thus, due to the aforementioned reasons, we expect the company’s total silver shipments and gold shipments to be lower than the company’s guidance of 28 million silver ounces and 340,000 gold ounces for 2017. However, if the company reports better than expected results, our fair value estimate of $23 for the company will be revised to incorporate the latest results.

You can make changes to our assumed figures to arrive at your own fair price estimate for the company.


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