Wheaton Precious Metals Stock remains down nearly 7% year-on-year and about 25% from its April 2022 highs. There are a few factors that drive the stock down. First, gold prices have fallen nearly 10% in recent months from $2,050 an ounce in mid-March to the current $1,850 level, with the price remaining almost flat year-on-year. Silver, which is the second biggest driver of Wheaton’s revenue, and palladium also improved slightly. In addition, Wheaton’s production also declined recently, with the equivalent ounce of gold down nearly 13% year-on-year in the first quarter due to lower production at the Salobo and 777 mines. Wheaton’s revenue and earnings also contracted on a year-over-year basis in the first quarter of 2022. However, we do see a few factors that could drive the stock higher in the near term.
The Federal Reserve is raising interest rates at a more aggressive pace to curb rising inflation, with its most recent 0.75% hike on Wednesday, the biggest rate hike since 1994. Higher rates have led to a stronger US dollar and improved Treasury yields. – Both are considered safe-haven assets – putting pressure on the price of non-yielding bullion. However, we think these developments could ultimately bode well for the precious metals. Indicators point to a near-term recession in the United States, along with the yield curve, which is seen as a fairly reliable predictor of an economic downturn. Consumer confidence in the US is also falling, as high inflation puts pressure on the household budget. Geopolitical uncertainties have been rising since Russia’s ongoing invasion of Ukraine. Trefis believes that these factors are likely to propel gold prices up until global macroeconomic and geopolitical stability is achieved.
Given that about 47% of Wheaton’s sales in Q1 came from gold and 43% from silver, the stock could rally if investors eventually look for safe havens in the face of a recession. Wheaton’s balance sheet also looks strong, as it has largely paid off debt over the years, with its cash and cash equivalents standing at a healthy $376 million at the end of last quarter. we guess Wheaton Precious Metals Valuation At $49 per share, which is about 27% higher than the current market price. View our analysis Wheaton Precious Metals Revenue For more information on the company’s business model and major revenue streams.
Stock prices across sectors have fallen sharply in recent months and we are now in a bear market for the first time since March 2020, when the COVID-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis.market crash comparison,
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