News about Agnico Eagle

Agnico Eagle Mines Ltd. (AEM), a Toronto-based gold miner, reported third-quarter profit of $1.35 billion, or $2.67 per share. Adjusted for non-recurring gains, earnings were $2.61 per share, topping the $2.47 average estimate of six analysts surveyed by Zacks Investment Research. Revenue for the period was $3.58 billion. AEM shares have climbed nearly 8% since the start of the year, and in the final minutes of trading they hit $182.58, up 16% over the past 12 months.

Freedom Broker downgraded Agnico Eagle Mines, citing operational risks at Canadian Malartic and Odyssey and trimmed earnings and EBITDA projections after revenue came in slightly below estimates. The broker noted the stock trades at a premium to peers, so any execution issues or cost inflation could weigh more heavily on profit expectations. The company, with long-life gold assets in Canada, Australia, Finland and Mexico, reports a return on equity of 20.5% and a net profit margin of 40.4%. Forecasts now point to declining earnings and revenue over the next three years, and the shares have fallen about 6% over one day and roughly 13% over the past month ahead of the October 28 earnings release. Some pessimistic analysts see revenue falling toward US$10.2b and earnings toward roughly US$4.8b by 2029, though those forecasts predate the downgrade.

Agnico Eagle Mines shares have gained about 290.9% over the past three years, though recent pullbacks have raised questions about whether earnings support the valuation. The stock trades at about 15.2x earnings, below the Metals and Mining industry average of roughly 18.1x and a peer average of about 17.2x. The author views this P/E gap as a sign that investors are not paying as high a price per dollar of profit as for comparable miners, and that the fair multiple implied by the valuation work is higher than the current level. New exploration results near the Macassa Mine point to additional high-grade gold potential, but the article says the P/E discount has not fully closed.