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Wheaton Precious Metals
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=== Relative === In the meantime, from a relative perspective, it is notable that WPM is cheaper than its peers on 72% (26 out of 36) of the valuation measures observed in Exhibit 18 if Edison estimates are adopted or 61% (22 out of 36) of the same valuation measures if consensus forecasts are adopted. {| class="wikitable" |+Exhibit 18: WPM comparative valuation versus a sample of operating and royalty/streaming companies<ref>Source: Refinitiv, Edison Investment Research. Note: Peers priced on 23 June 2022. *Derived using Edison forecasts and average consensus multiples.</ref> ! ! colspan="3" |P/E (x) ! colspan="3" |Yield (%) ! colspan="3" |P/CF (x) |- ! !Year 1 !Year 2 !Year 3 !Year 1 !Year 2 !Year 3 !Year 1 !Year 2 !Year 3 |- |Royalty companies | | | | | | | | | |- |Franco-Nevada |35.7 |36.6 |36.7 |0.9 |0.9 |1.0 |25.9 |25.5 |26.2 |- |Royal Gold |27.8 |25.1 |25.6 |1.3 |1.3 |1.4 |16.2 |14.4 |14.8 |- |Sandstorm Gold |32.5 |31.9 |36.7 |0.0 |0.0 |0.0 |13.2 |13.2 |13.5 |- |Osisko |36.1 |26.2 |22.4 |1.5 |1.5 |1.5 |16.3 |13.2 |12.5 |- |Average |33.0 |28.5 |29.6 |0.9 |0.9 |1.0 |17.9 |16.6 |16.7 |- |WPM (Edison forecasts) |27.1 |22.2 |22.8 |1.6 |1.8 |1.9 |18.9 |15.6 |15.5 |- |WPM (consensus) |26.3 |25.8 |26.7 |1.5 |1.6 |1.2 |18.5 |17.6 |17.6 |- |Implied WPM share price (US$)* |46.54 |49.03 |49.67 |66.46 |74.59 |76.96 |36.24 |40.42 |41.12 |} Within this context, it is worth noting that Edison forecasts imply that WPM’s EPS, DPS and cash flow will increase in FY23 and FY24 (relative to FY22), not least under the influence of the company’s increasing production profile (see Exhibit 9). By contrast, consensus forecasts appear to indicate that the market expects WPM’s EPS and cash flow to be broadly unchanged in FY23 and FY24 relative to FY22, implying that it is either not expecting any production/sales increase, or that it is anticipating the degree of any production/sales increase to be offset by an approximately equal and opposite move in precious metals prices. The consensus also appears to indicate that it believes that WPM’s dividend will remain approximately flat in FY23, before being cut in FY24.
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