From $45 to $85: Is Wheaton Precious Metals Still a Buy in 2025?
$WPM My Updated Valuation After WPM’s Record Q1 Revenue—and Why It Could Hit $170
Welcome to the ROI Club.
More than a month has passed since ‘Liberation day’, or the announcement of tariff-tactics from the new Whitehouse administration which caused sharp volatility for the first 2 weeks of April.
For the moment at least, some stability has return to capital market pricing, although there’s little doubt that we have now entered into a permanently distinct global trade environment which markets will no doubt need some time to digest.
Most major companies have now put out their earnings for the first quarter/trimester of 2025 and today I thought I would comment on of my largest holdings which, much to my liking, is also one of my top performers - WPM 0.00%↑ (Wheaton Precious Metals).
Firstly however, a few updated thoughts on gold and gold stocks.
Gold, interestingly, is not on the list of tariffs and appears to be well and truly in a bull market, having hit all time highs this year gold still appears to have plenty of legs with major investment banks targeting $4K gold by mid 2026
Gold is going to the moon, mainly because the fiat currencies against which it’s measured are, in the words of my uncle Rick, ‘going the way of the dodo’.
Quick reminder grab your ticket to the Rule symposium here
As such, I continue to perform my monthly alchemy explained in the piece below as a way of protecting my savings until I find something I want to buy (property in Argentina - stay tuned).
Now, you might be thinking something along the lines of - but how can I outperform the gold price?
Or even - Surely If gold does well the gold stocks should do even better?
Well, this is where I have somewhat of a contrarian take.
If you’re like most and blindly believe that gold stocks will give you leverage to the gold price (I used to) I humbly suggest that things might not be so simple.
I’ve been saying for a while now that most people will get the thesis right and still not make money due to mainly: asset selection and investment execution.
For gold producers, while current valuations look cheap, they’re not a buy-and-hold given the nature of their underlying business model economics, hence one needs to time things well and have the discipline not to overstay one’s welcome.
Developers require even more sound timing and as for explorers, well…. good luck.
The narrative that the worst levered companies do the best in commodity bull runs is somewhat flawed in terms of selection bias, attrition and depends heavily on the time frame.
After graduating in 2014 I swore never to set foot again into the realm of academia so instead I’ll illustrate my point with a few basic charts that are not too in-depth.
From there you’ll appreciate my insistence on narrowing my focus to operating models with superior economics such as Royalty & Streaming Co.s
Look above and ask yourself
‘How can a sector who sells something whose price rose 121% not only not do better, but actually do worse?’
Capital intensity + Expense column variability - that’s how.
Now it’s true that the GDX is a mixed bag and the example above is over a compressed timeline, so let’s add in some of the biggest longstanding producers, NEM and Barrick and compare over circa 25 years.
On March 31st, 2024 WPM was trading at $45 and I wrote that I thought WPM was one of the simplest, low risk doubles I could see in the metals market before even taking into account its optionality on future deposits.
Here’s an excerpt from the piece above:
Here’s what that might look like using the above method in an environment where the GEO price, their margins and their market multiple improved by 10% each.
800Koz at $2,750 / Oz at 82.5% margin on an EV/EBITDA of 22x…
Close enough to $40 Billion EV or 100% upside with no further credit extended for production increases.
As of today, May 12, 2025 the Market cap is $39 Billion and the Enterprise value sits at $38 Billion with the stock price at $85.77, so not quite a double (yet) but close.
The interesting thing is that the EV/EBITDA multiple actually contracted from 24x down to 23x over the time period, suggested that from this point of view, the company is actually cheaper than a year ago despite achieved a record revenue.
With the latest earnings report available I thought I’d revisit and update the numbers to share my updated valuation with premium members.
Let’s take a look
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