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Wheaton Precious Metals Corp. (TSE:WPM) shareholders are probably feeling a little disappointed, since its shares fell 9.5% to CA$58.22 in the week after its latest quarterly results. It was a workmanlike result, with revenues of US$307m coming in 3.5% ahead of expectations, and statutory earnings per share of US$0.33, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Wheaton Precious Metals' 13 analysts are now forecasting revenues of US$1.41b in 2021. This would be a sizeable 37% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 72% to US$1.65. Before this earnings report, the analysts had been forecasting revenues of US$1.42b and earnings per share (EPS) of US$1.65 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$58.10, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Wheaton Precious Metals, with the most bullish analyst valuing it at US$90.61 and the most bearish at US$53.56 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Wheaton Precious Metals' growth to accelerate, with the forecast 37% growth ranking favourably alongside historical growth of 5.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wheaton Precious Metals to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$58.10, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Wheaton Precious Metals analysts - going out to 2024, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Wheaton Precious Metals that you need to be mindful of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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