How The Drop In Gold And Silver Prices Has Affected Wheaton Precious Metals Stock

by Trefis Team
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Wheaton Precious Metals
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Wheaton Precious Metals stock (NYSE: WPM) has dropped 13% in the last one month and now trades below $40. The decline in the stock was driven by drop in gold and silver prices. Global gold prices have dropped more than 4%, while the silver price has declined over 6% in the last month. A stronger dollar has led to weakness in prices of precious metals. As most of WPM’s revenues comes from gold and silver, the stock dropped over recent weeks. But will WPM’s stock continue its downward trajectory over the coming weeks, or is a recovery in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for WPM stock are likely to be almost 8% in the next three-month (63 trading days) period after experiencing a 13% drop over the previous one-month (21 trading days) period. Also, there is a 60% chance of the stock giving positive returns over the next three months. But how would these numbers change if you are interested in holding WPM stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test WPM stock price forecast after a rise or fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day! For additional details about Wheaton Precious Metals’ business, see how WPM Revenue is generated.

MACHINE LEARNING ENGINE – try it yourself:

IF WPM stock moved by -5% over five trading days, THEN over the next 21 trading days, WPM stock moves an average of 2.7%, with a 55% probability of positive return.

Some Fun Scenarios, FAQs & Making Sense of WPM Stock Movements:

Question 1: Is the price forecast for Wheaton Precious Metals Corp (Canada) stock higher after a drop?

Answer:

Consider two situations,

Case 1: Wheaton Precious Metals Corp (Canada) stock drops by -5% or more in a week

Case 2: Wheaton Precious Metals Corp (Canada) stock rises by 5% or more in a week

Is the price forecast for Wheaton Precious Metals Corp (Canada) stock higher over the subsequent month after Case 1 or Case 2?

WPM stock fares better after Case 2, with an expected return of 2.7% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 2.9% for Case 2. This implies a price forecast of $40 in Case 1 and a figure of $40 in Case 2 using WPM market price of $38.73 on 9/28/2021.

In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.

Try the Trefis machine learning engine above to see for yourself how the forecast for Wheaton Precious Metals Corp (Canada) stock is likely to changes after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Wheaton Precious Metals Corp stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For WPM stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the stock price forecast after a rise if you wait for a while?

Answer:

The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although WPM stock appears to be an exception to this general observation.

WPM’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Wheaton Precious Metals Corp stock by changing the inputs in the charts above.

 

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