Time To Sell Or More Gains Ahead? – Wheaton Precious Metals Corp. (WPM), Embraer S.A. (ERJ)

Wheaton Precious Metals Corp. (NYSE: WPM) shares are 78.32% up in the year-to-date (YTD) period and have moved 3.27% or $1.68 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +184.30% lower. Comparatively, the stock is -8.36% down YTD and 22.80% over the trailing 3-month period. If we look at the shorter duration, its week performance is 2.97% and -4.52% over the month.

Analyst Recommendations

On July 20, 2020, Barclays recommended the WPM stock is a Underweight, while earlier, BMO Capital Markets had Downgrade the stock as a Market Perform on August 20, 2020. 15 analysts offering the recommendations for the stock have a consensus rating of 2.10 to suggest that the WPM stock is a “Moderate Buy. 1 of the 15 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 8 recommend buying, with 1 rating it as an Overweight.

The stock currently trades at $53.05 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $46.08. The forecasts give the Wheaton Precious Metals Corp. stock a price target range of $66.10 on the higher side while at least one analyst think the stock could plunge to a low of $38.00. The two limits represent an upside potential of 19.74% or -39.61%.

Earnings Forecast

Analysts estimate the earnings to increase 15.80% in the current quarter to $0.28, up from the $0.16 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $1.05, up 26.10% from $0.56 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.22 and $0.43. Wall Street estimates earnings per share to be at an average of $1.34 for the next year.

Embraer S.A. (NYSE:ERJ), on the other hand, is trading around $5.16 with a market cap of $961.57M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $6.60 and spell out a more modest performance – a 21.82% return. Some analysts are even forecasting -$2.09 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Embraer S.A. (ERJ) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

ERJ’s operating expenses over the recent quarter were at $359.6 million. This represented a 33.06% of the company’s total revenues which amounted $537.2 million. With this in place, we can see that the company’s diluted EPS declined -$1.71 on the year-over-year period, growing to $0.04 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $10.33 billion from $10.86 billion over the previous quarter. Short term investments amounted to $127.7 million while total current assets were at $6.08 billion. The cash flow from operating activities totaled -$1.09 billion, significantly lower than the -$315.8 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$1.16 billion.

Major holders

Insiders own 12.40% of the company shares, while shares held by institutions stand at 40.40% with a share float percentage of 174.78M. Investors are also buoyed by the number of investors in a company, with Embraer S.A. having a total of 205 institutions that hold shares in the company.