The brokerage believes the company is sitting with a strong cash flow and exposed itself to the next-cycle development projects. The company would be adding eight projects in its portfolio to the existing 22 operations. As a result, the analysts think silver-equivalent production would reach 54.7 million ounces in the current year and expand to 57 million ounces next year.
In the following years, Deutsche Bank thinks Silver Wheaton needs to just add minimum overhead for possible increase by striking deals or project development. The analysts are not worried about the leverage relative to some of its rivals and believe the balance sheet will remain strong. Therefore, the analysts think the stock offers upside potentials.
"Diversified assets with low operating cost exposure reduces risk vs Producers Silver Wheaton currently generates ~60 percent of revenue from silver and ~40 percent from gold across 22 producing assets. Since listing in 2004, it has continued to increase the number of assets and regions it is exposed to," the analysts told clients in a research note.
As far as risk factors, the brokerage listed project delays, M&A, lower-than-expected silver and gold prices, and change in tax legislation.
In the pre-market trading, the stock was seen at $28.53, down 1.28 percent.
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