The Sky Is the Limit with Strong Q1 2016 Earnings for SLW…

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Silver Wheaton Corporation (SLW) is currently trading at $17.62 per share on the New York Stock Exchange. It has enjoyed a bull run in 2016, when most other equities have hit the dirt. At the start of the year, SLW stock was trading at $12.26 per share, and it has rallied substantially to its current level. The stock has a 52-week high of $21.12 and a 52-week low of $10.04. At current market prices, it has a market capitalization of $7.08 billion with a 1-year target price of $20.95. The earnings per share is currently 0.15 and the dividend & yield is 0.20.

Silver Wheaton Stock Prices Are Dependent on Performance of Precious Metals & Fed Rates

Analysts are overwhelmingly bullish on this stock, given its strong quarterly earnings in 2016. The stock has a mean recommendation of 2.0. On a rating scale of 1.0 (a strong buy) and 5.0 (a strong sell) the stock is clearly a buy. With a high target price of $24 per share and a low target price marginally higher than the current trading price at $17.60, there is plenty of reason to be optimistic about the future prospects of the stock. Over the past year, the upgrade/downgrade history of the stock has been mixed.

This is enough to give traders pause and to evaluate the consistency of performance of Silver Wheaton Corporation. On 8 January 2016, CIBC upgraded the stock from a sector perform to a sector outperform. However, in Q4 2015, Raymond James downgraded the stock from an outperform to a market perform and BMO Capital Markets downgraded it from an outperform to a market perform. If we take a look at the recommendation trends of the stock based on Thompson/First Call recommendations, there has been a steady trend favouring a strong buy and a buy recommendation. The number of hold, underperform or sell recommendations is minimal or zero over the past 3 months.

Silver Wheaton Corporation: Of Bulls and Bears

Despite its bullish performance, analysts across the board do not rate it as a buy. For example, there are several elements of the company’s performance that give traders reason to question its upward momentum. This makes it difficult to recommend a buy or sell rating either way and the consensus forecast is therefore a hold. Silver Wheaton Corporation has several notable strengths including a sound financial position. It also has solid revenue growth figures and manageable debt levels. But its weaknesses are also evident in declining net income and poor ROE (Return on Equity). The earnings per share performance of SLW over the past 1 year were -0.41, 2 years ago +0.56 and 3 years ago +1.06.

If we switch our attention to Silver Wheaton Corporation’s technical performance, the moving averages and technical indicators reflect a strong buy proposition. The company recently announced that it had exercised an overallotment option of shares valued at $16.60 per share for a total quantity of 4,970,250 shares. The sale will be completed on Thursday, 14 April and gross proceeds will be boosted by $82.5 million The underwriters of this offering include BMO Capital Markets, RBC Capital Markets, Scotia Bank and CIBC Capital Markets. This Supplement which was dated March 31, 2016 was part of the offering may to investors.

Gold is currently trading at $1255.40 an ounce, down 0.10% or $1.30, while silver is trading at $16.11 per ounce, up 0.85% or $0.13. It should be remembered that the performance of Silver Wheaton stock is heavily dependent on the price of gold, and to a lesser degree silver. With the Fed likely to adopt a dovish approach to interest rate hikes, gold has been able to rally. This benefits companies like Silver Wheaton. This Canada-based mining corporation is deeply invested in the precious metals sector and current Fed policy is helping to drive prices higher.