We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AEM Stock Rallies 40% in 6 Months: Should You Buy the Stock Now?
Read MoreHide Full Article
Key Takeaways
AEM shares jumped 40% in six months on higher gold prices and stronger-than-expected earnings.
The company is advancing major projects like Odyssey and Hope Bay to boost output and cash flow.
AEM's solid cash flow cut net debt to $5M, backed $251M in Q1 shareholder returns, and supports future growth.
Agnico Eagle Mines Limited (AEM - Free Report) shares have surged 40% in the past six months. The upside has been fueled by an upswing in gold prices and AEM’s forecast-topping earnings performance on higher realized prices and strong production.
AEM has modestly underperformed the Zacks Mining – Gold industry’s 40.5% rise while outperforming the S&P 500’s increase of 3.9% over the past six months. Its gold mining peers, Barrick Mining Corporation (B - Free Report) , Newmont Corporation (NEM - Free Report) and Kinross Gold Corporation (KGC - Free Report) , have rallied 31.4%, 37.6% and 49.5%, respectively, over the same period.
AEM’s 6-month Price Performance
Image Source: Zacks Investment Research
Agnico Eagle has been trading above the 200-day simple moving average (SMA) since March 4, 2024. The stock is also currently trading above the 50-day SMA, which continues to read higher than the 200-day SMA, indicating a bullish trend.
Agnico Eagle’s Shares Trade Above 50-Day SMA
Image Source: Zacks Investment Research
Let’s take a look at AEM’s fundamentals to better analyze how to play the stock.
AEM Stock Poised for Growth on Advancement of Key Projects
Agnico Eagle is focused on executing projects that are expected to provide additional growth in production and cash flows. It is advancing its key value drivers and pipeline projects, including the Odyssey project in the Canadian Malartic Complex, Detour Lake, Hope Bay, Upper Beaver and San Nicolas.
The Hope Bay Project, with proven and probable mineral reserves of 3.4 million ounces, is expected to play a significant role in generating cash flow in the years to come. The processing plant expansion at Meliadine was completed and commissioned in the second half of 2024, with mill capacity expected to increase to roughly 6,250 tons per day in 2025.
The merger with Kirkland Lake Gold established Agnico Eagle as the industry's highest-quality senior gold producer. The integrated entity now has an extensive pipeline of development and exploration projects to drive sustainable growth. It also has the financial flexibility to fund a strong pipeline of growth projects.
AEM’s Solid Financial Health Supports Capital Allocation
AEM has a robust liquidity position and generates substantial cash flows, which allow it to maintain a strong exploration budget, finance a strong pipeline of growth projects, pay down debt and drive shareholder value. Its operating cash flow jumped roughly 33% year over year to record $1,044 million in the first quarter.
AEM generated solid first-quarter free cash flows of $594 million, up around 50% year over year, backed by the strength in gold prices and strong operational results. It remains focused on paying down debt using excess cash, with net debt reducing by $212 million sequentially to just $5 million at the end of the first quarter. Its long-term debt-to-capitalization is just around 5%. AEM also returned around $920 million to its shareholders through dividends and share repurchases last year and $251 million in the first quarter.
Higher gold prices should boost AEM’s profitability and drive cash flow generation. Gold prices are up roughly 27% this year, largely due to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump, which have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies. Gold prices shot up to a record high of $3,500 per ounce on April 22. While gold prices have fallen from their April 2025 high, they remain favorable, aided by geopolitical tensions, and are currently hovering above the $3,300 per ounce level. Increased purchases by central banks and geopolitical tensions are factors expected to help the yellow metal sustain the rally.
AEM offers a dividend yield of 1.3% at the current stock price. It has a five-year annualized dividend growth rate of 6.9%. AEM has a payout ratio of 32% (a ratio below 60% is a good indicator that the dividend will be sustainable). The company's dividend is perceived as safe and reliable, backed by strong cash flows and sound financial health.
AEM’s Earnings Estimates Instill Optimism
The Zacks Consensus Estimate for AEM’s 2025 earnings has been going up over the past 60 days. The consensus estimate for second-quarter 2025 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $6.45, suggesting year-over-year growth of 52.5%. Earnings are expected to register roughly 52.3% growth in the second quarter.
Image Source: Zacks Investment Research
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Agnico Eagle Stock Trades at a Premium
Agnico Eagle is currently trading at a forward price/earnings of 18.04X, a roughly 42.7% premium to the industry average of 12.64X. AEM is also trading at a premium to Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of C. Both Barrick Mining and Newmont have a Value Score of A, while Kinross Gold has a Value Score of B.
AEM’s P/E F12M Vs. Industry, B, NEM & KGC
Image Source: Zacks Investment Research
Final Thoughts: Buy AEM Shares
With a strong pipeline of growth projects and solid financial health, AEM presents a compelling investment case for those seeking exposure to the gold mining space. A healthy growth trajectory and rising earnings estimates are the other positives. A favorable gold pricing environment also augurs well. We advise investors to bet on this Zacks Rank #1 (Strong Buy) stock now, as it has solid growth prospects.
Image: Bigstock
AEM Stock Rallies 40% in 6 Months: Should You Buy the Stock Now?
Key Takeaways
Agnico Eagle Mines Limited (AEM - Free Report) shares have surged 40% in the past six months. The upside has been fueled by an upswing in gold prices and AEM’s forecast-topping earnings performance on higher realized prices and strong production.
AEM has modestly underperformed the Zacks Mining – Gold industry’s 40.5% rise while outperforming the S&P 500’s increase of 3.9% over the past six months. Its gold mining peers, Barrick Mining Corporation (B - Free Report) , Newmont Corporation (NEM - Free Report) and Kinross Gold Corporation (KGC - Free Report) , have rallied 31.4%, 37.6% and 49.5%, respectively, over the same period.
AEM’s 6-month Price Performance
Agnico Eagle has been trading above the 200-day simple moving average (SMA) since March 4, 2024. The stock is also currently trading above the 50-day SMA, which continues to read higher than the 200-day SMA, indicating a bullish trend.
Agnico Eagle’s Shares Trade Above 50-Day SMA
Let’s take a look at AEM’s fundamentals to better analyze how to play the stock.
AEM Stock Poised for Growth on Advancement of Key Projects
Agnico Eagle is focused on executing projects that are expected to provide additional growth in production and cash flows. It is advancing its key value drivers and pipeline projects, including the Odyssey project in the Canadian Malartic Complex, Detour Lake, Hope Bay, Upper Beaver and San Nicolas.
The Hope Bay Project, with proven and probable mineral reserves of 3.4 million ounces, is expected to play a significant role in generating cash flow in the years to come. The processing plant expansion at Meliadine was completed and commissioned in the second half of 2024, with mill capacity expected to increase to roughly 6,250 tons per day in 2025.
The merger with Kirkland Lake Gold established Agnico Eagle as the industry's highest-quality senior gold producer. The integrated entity now has an extensive pipeline of development and exploration projects to drive sustainable growth. It also has the financial flexibility to fund a strong pipeline of growth projects.
AEM’s Solid Financial Health Supports Capital Allocation
AEM has a robust liquidity position and generates substantial cash flows, which allow it to maintain a strong exploration budget, finance a strong pipeline of growth projects, pay down debt and drive shareholder value. Its operating cash flow jumped roughly 33% year over year to record $1,044 million in the first quarter.
AEM generated solid first-quarter free cash flows of $594 million, up around 50% year over year, backed by the strength in gold prices and strong operational results. It remains focused on paying down debt using excess cash, with net debt reducing by $212 million sequentially to just $5 million at the end of the first quarter. Its long-term debt-to-capitalization is just around 5%. AEM also returned around $920 million to its shareholders through dividends and share repurchases last year and $251 million in the first quarter.
Higher gold prices should boost AEM’s profitability and drive cash flow generation. Gold prices are up roughly 27% this year, largely due to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump, which have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies. Gold prices shot up to a record high of $3,500 per ounce on April 22. While gold prices have fallen from their April 2025 high, they remain favorable, aided by geopolitical tensions, and are currently hovering above the $3,300 per ounce level. Increased purchases by central banks and geopolitical tensions are factors expected to help the yellow metal sustain the rally.
AEM offers a dividend yield of 1.3% at the current stock price. It has a five-year annualized dividend growth rate of 6.9%. AEM has a payout ratio of 32% (a ratio below 60% is a good indicator that the dividend will be sustainable). The company's dividend is perceived as safe and reliable, backed by strong cash flows and sound financial health.
AEM’s Earnings Estimates Instill Optimism
The Zacks Consensus Estimate for AEM’s 2025 earnings has been going up over the past 60 days. The consensus estimate for second-quarter 2025 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $6.45, suggesting year-over-year growth of 52.5%. Earnings are expected to register roughly 52.3% growth in the second quarter.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Agnico Eagle Stock Trades at a Premium
Agnico Eagle is currently trading at a forward price/earnings of 18.04X, a roughly 42.7% premium to the industry average of 12.64X. AEM is also trading at a premium to Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of C. Both Barrick Mining and Newmont have a Value Score of A, while Kinross Gold has a Value Score of B.
AEM’s P/E F12M Vs. Industry, B, NEM & KGC
Final Thoughts: Buy AEM Shares
With a strong pipeline of growth projects and solid financial health, AEM presents a compelling investment case for those seeking exposure to the gold mining space. A healthy growth trajectory and rising earnings estimates are the other positives. A favorable gold pricing environment also augurs well. We advise investors to bet on this Zacks Rank #1 (Strong Buy) stock now, as it has solid growth prospects.
You can see the complete list of today’s Zacks #1 Rank stocks here.