On Thursday, National Bank Financial adjusted its stance on Wheaton Precious Metals (NYSE:WPM:CN) (NYSE: WPM), raising the stock from Sector Perform to Outperform. Accompanying this upgrade, the firm also increased the price target for Wheaton Precious Metals from Cdn$90.00 to Cdn$105.00. The revision reflects a positive outlook on the company's valuation in light of updated commodity price assumptions.
The upgrade was prompted by a recent review of precious metal price forecasts. National Bank Financial's analysis indicates that elevated long-term precious metal prices contribute to a more favorable valuation of Wheaton Precious Metals compared to its industry counterparts. This reassessment is part of a broader Precious Metals Price Update conducted by the firm.
In addition to the impact of revised commodity price assumptions, the analyst highlighted Wheaton Precious Metals' strategic positioning in the current market. The company has approximately US$1.75 billion in capital commitments, which are expected to fuel over 6% growth in top-line revenue over the next three years. These figures are based on deals that Wheaton Precious Metals secured in previous years.
The analyst also noted the current market dynamics that make it increasingly difficult for companies to pursue accretive acquisitions. In this context, Wheaton Precious Metals' existing portfolio and capital commitments are seen as a competitive advantage, allowing the company to maintain growth without relying on new acquisitions.
The updated price target and stock rating reflect National Bank Financial's confidence in Wheaton Precious Metals' growth prospects and its ability to capitalize on favorable precious metal prices. The firm's analysis suggests that the company is well-positioned to outperform its sector peers moving forward.
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