Make better investment decisions with Simply Wall St’s easy, visual tools that give you a competitive edge.
-
If you are trying to work out whether Wheaton Precious Metals is attractively priced or already reflecting high expectations, the recent share price and valuation checks give you plenty to think about.
-
The stock closed at US$208.71, with returns of 4.2% over 7 days, 18.1% over 30 days, 28.9% year to date, 80.6% over 1 year, 223.3% over 3 years and 314.8% over 5 years. These figures may prompt questions about how much optimism is already in the price.
-
Recent coverage has focused on the stock’s strong multi year return profile and how investors are reassessing precious metals exposure in portfolios. This helps frame the current enthusiasm around Wheaton Precious Metals. Commentary has also highlighted the company’s role in the broader materials sector and how its performance compares with peers during periods of shifting sentiment toward metals related assets.
-
Despite this track record, Wheaton Precious Metals currently scores 0 out of 6 on Simply Wall St’s valuation checks. The next sections will walk through what different valuation approaches say about the stock and then finish with a way to think about value that goes beyond any single model.
Wheaton Precious Metals scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s dollars to estimate what the entire business might be worth right now.
For Wheaton Precious Metals, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest reported Free Cash Flow is $563.2m. Analysts provide detailed estimates for the next few years, and Simply Wall St then extrapolates further to build a 10 year view, including a projected Free Cash Flow of $2,631.5m in 2028. The ten year schedule combines both analyst inputs and these extrapolated figures, all expressed in $.
When those projected cash flows are discounted back to today, the DCF model arrives at an estimated intrinsic value of $126.64 per share. Compared with the recent share price of US$208.71, this implies the stock is about 64.8% above the DCF estimate. This suggests investors are currently paying a high premium to these cash flow projections.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Wheaton Precious Metals may be overvalued by 64.8%. Discover 7 high quality undervalued stocks or create your own screener to find better value opportunities.
