Wheaton Precious Metals Corp’s (NYSE:WPM) announced its latest earnings update in September 2017, which confirmed that the business turned profitable again after incurring losses in the last financial year. Today I want to provide a brief commentary on how market analysts view Wheaton Precious Metals’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Wheaton Precious Metals
Analysts’ outlook for next year seems positive, with earnings growing by a robust 41.06%. This growth seems to continue into the following year with rates arriving at double digit 52.17% compared to today’s earnings, and finally hitting $328.5M by 2021.
Although it is useful to be aware of the growth rate each year relative to today’s level, it may be more valuable to determine the rate at which the business is growing every year, on average. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Wheaton Precious Metals’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.75%. This means that, we can expect Wheaton Precious Metals will grow its earnings by 8.75% every year for the next few years.
For Wheaton Precious Metals, there are three pertinent aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is WPM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WPM is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WPM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.