Wheaton fell faster than its profit forecasts
Our call: Buy Wheaton Precious Metals (WPM), with a 12-month price target of $147. It closed at $122.37 on Oct 26, so our target is 20.1% higher, or 20.8% counting the dividend. Our Buy bar is at least 15%.
What the company does
Wheaton is a streaming company. It pays miners cash up front, and in return buys part of their gold and silver at a fixed, low price. In the second quarter it paid about $543 an ounce for gold it sold at $4,452. It runs no mines. Gold made up 46% of its sales and silver 52%.
Why the stock fell
- Oct 22: New attacks on ships near the Strait of Hormuz pushed oil higher and raised fears of more inflation and a Fed rate hike in December. Gold and silver pay no interest, so higher rates hurt them. Silver fell about 6%, gold about 3%, and Wheaton 6.5%.
- The week: Wheaton fell 7.3%, more than gold (−2.9%) or silver (−5.0%).
- No bad company news.
Why we rate it a Buy now
The stock fell faster than its forecasts. Wall Street cut its 2027 profit forecast by about 4% this week, to $4.89 of EPS, or profit per share. The P/E ratio is the share price divided by EPS: how many years of profit you pay for. On 2027 profit, Wheaton trades at 25.0 times; Franco-Nevada 26.0, OR Royalties 24.7, Triple Flag 20.4, Royal Gold 18.5. Our target is 30 times 2027 profit. We pay up because Wheaton expects its output to grow about 50% by 2030. Our target sits below the lowest Wall Street target, $154.
What could go wrong
The trend is down. Wheaton trades below its average price of the past 50 trading days ($143) and of the past 200 ($134). Gold sits 11% and silver 24% below their own 200-day averages, and silver is 26% below what Wheaton got for it in the second quarter, so forecasts could fall again. A further 4.6% cut to 2027 profit, or a 28 times multiple, would push the return under our 15% bar.
On Oct 6, Chile's state copper company, Codelco, said its 2024–25 output may have been double-counted. Wheaton sells no copper, so this doesn't touch its numbers.
What to watch
- Better case, $171: 32 times the 2027 forecast Wall Street had 90 days ago, if metals recover.
- Base case, $147: 30 times today's 2027 forecast.
- Worse case, $110: 22.5 times, the middle of its peers, 10.1% below today.
- Wed Oct 28: the Fed's rate decision, 2:00 pm ET.
- Thu Nov 5: third-quarter results after the close; call Fri Nov 6 at 11:00 am ET.
- Chart check: support, where buyers stepped in before, is the July lows of $103 to $108. A close back above the 200-day average, about $134, would turn the trend up.
Sources: Wheaton Precious Metals (Aug 6 and Oct 6, 2026), Kitco (Oct 22), Codelco (Oct 6), Nasdaq and Yahoo Finance (Oct 26). Estimates are Sixhundred's.
Research, not investment advice, and not an offer or recommendation to buy or sell anything.