Wheaton Precious Metals cut at RBC as fairly valued ahead of short-term growth (NYSE:WPM)
Wheaton Precious Metals (NYSE:WPM) -3.3% in Tuesday’s trading after RBC Capital downgraded shares to Sector Perform from Outperform with a $45 price target, trimmed from $50, saying the stock now trades at the upper end of its normal valuation range, and whose sector-leading short-term growth profile is appropriately priced in.
RBC’s Josh Wolfson noted the introduction of OECD minimum taxation is approaching, which will affect offshore mine streaming by large Canadian companies.
In 2021, the OECD proposed a global minimum tax rate of 15% by 2023 for companies generating revenues exceeding €750M, and Canada recently reaffirmed its commitment to introducing the tax at the start of next year.
The global minimum tax is well understood but not reflected within consensus estimates, and it is material, Wolfson said; Wheaton’s (WPM) overall business is 88% contributed by offshore streaming that pays no material taxes via the Cayman Islands, and a tax gross-up to 15% for the company would cut RBC’s net asset valuation by 10%.
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