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Agnico Eagle Mines Limited's (AEM - Free Report) shares have surged 52% in the past six months. The upside has been fueled by an upswing in gold prices to historic highs and AEM’s forecast-topping earnings performance, driven by higher realized prices and strong production.
AEM has modestly underperformed the Zacks Mining – Gold industry’s 55.5% rise while outperforming the S&P 500’s increase of 29.2% 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 76.2%, 73.5% and 84.8%, 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. At Canadian Malartic, Agnico Eagle is advancing the transition to underground mining with the construction of the Odyssey mine and executing other opportunities to beef up annual production.
During the second quarter of 2025, AEM continued exploration drilling to extend the East Gouldie deposit at Canadian Malartic to the east. It also advanced the development of the production levels at East Gouldie, with work in progress for the planned start-up in the second half of 2026.
At Hope Bay, drilling results at Patch 7 also suggest the potential for mineral resource expansion. Moreover, drilling at the Marban deposit, added through the acquisition of O3 Mining, focuses on mineral reserve and mineral resource expansion. AEM also continued to work on a feasibility study at San Nicolas, with completion expected in late 2025. At Detour Lake, AEM started the development of the exploration ramp during the second quarter.
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 enable 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 for the second quarter was $1.85 billion, up 92% from $961 million a year ago.
AEM recorded second-quarter free cash flow of roughly $1.3 billion, more than doubling the prior-year quarter figure of $557 million. The increase was backed by the strength in gold prices and robust operational results. The company remains focused on paying down debt using excess cash, with long-term debt reducing by $550 million sequentially to $595 million at the end of the second quarter. It ended the quarter with a significant net cash position of $963 million, driven by the increase in cash position and reduction in debt. AEM also returned around $300 million in the second quarter.
Higher gold prices should boost AEM’s profitability and drive cash flow generation. Gold prices have soared roughly 54% 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.
The Federal Reserve’s interest rate reduction by a quarter of a percentage point, prospects of more rate cuts this year amid concerns over the labor market, along with growing concerns over a protracted U.S. government shutdown, have triggered the recent rally, driving prices north of $4,000 per ton for the first time. Increased purchases by central banks and geopolitical and trade tensions are the other factors expected to help the yellow metal sustain the upswing in gold prices.
AEM offers a dividend yield of 1% at the current stock price. It has a five-year annualized dividend growth rate of 3.2%. AEM has a payout ratio of 27% (a ratio below 60% is a good indicator that the dividend will be sustainable).
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 third-quarter 2025 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $7.14, suggesting year-over-year growth of 68.8%. Earnings are expected to grow roughly 50% in the third quarter.
Image Source: Zacks Investment Research
Agnico Eagle Stock Trades at a Premium
Agnico Eagle is currently trading at a forward price/earnings of 22.57X, a roughly 37.1% premium to the industry average of 16.46X. AEM is also trading at a premium to its gold mining peers, Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of D. Barrick Mining, Newmont and Kinross Gold have a Value Score of B, each.
AEM’s P/E F12M Vs. Industry, B, NEM & KGC
Image Source: Zacks Investment Research
Final Thoughts: Buy AEM Shares
AEM offers an attractive investment opportunity in the gold mining space, backed by a robust pipeline of growth projects, a strong financial footing and supportive technical trends. Surging gold prices are expected to further enhance profitability and strengthen cash flow generation. The company’s positive earnings growth outlook and upward-trending earnings estimates add to its appeal. While AEM trades at a premium, the valuation is well-supported by its strong fundamentals and earnings potential. We advise investors to bet on this Zacks Rank #1 (Strong Buy) stock now, as it has solid growth prospects.
Image: Bigstock
Should You Buy Agnico Eagle Stock After a 52% Rally in 6 Months?
Key Takeaways
Agnico Eagle Mines Limited's (AEM - Free Report) shares have surged 52% in the past six months. The upside has been fueled by an upswing in gold prices to historic highs and AEM’s forecast-topping earnings performance, driven by higher realized prices and strong production.
AEM has modestly underperformed the Zacks Mining – Gold industry’s 55.5% rise while outperforming the S&P 500’s increase of 29.2% 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 76.2%, 73.5% and 84.8%, 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. At Canadian Malartic, Agnico Eagle is advancing the transition to underground mining with the construction of the Odyssey mine and executing other opportunities to beef up annual production.
During the second quarter of 2025, AEM continued exploration drilling to extend the East Gouldie deposit at Canadian Malartic to the east. It also advanced the development of the production levels at East Gouldie, with work in progress for the planned start-up in the second half of 2026.
At Hope Bay, drilling results at Patch 7 also suggest the potential for mineral resource expansion. Moreover, drilling at the Marban deposit, added through the acquisition of O3 Mining, focuses on mineral reserve and mineral resource expansion. AEM also continued to work on a feasibility study at San Nicolas, with completion expected in late 2025. At Detour Lake, AEM started the development of the exploration ramp during the second quarter.
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 enable 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 for the second quarter was $1.85 billion, up 92% from $961 million a year ago.
AEM recorded second-quarter free cash flow of roughly $1.3 billion, more than doubling the prior-year quarter figure of $557 million. The increase was backed by the strength in gold prices and robust operational results. The company remains focused on paying down debt using excess cash, with long-term debt reducing by $550 million sequentially to $595 million at the end of the second quarter. It ended the quarter with a significant net cash position of $963 million, driven by the increase in cash position and reduction in debt. AEM also returned around $300 million in the second quarter.
Higher gold prices should boost AEM’s profitability and drive cash flow generation. Gold prices have soared roughly 54% 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.
The Federal Reserve’s interest rate reduction by a quarter of a percentage point, prospects of more rate cuts this year amid concerns over the labor market, along with growing concerns over a protracted U.S. government shutdown, have triggered the recent rally, driving prices north of $4,000 per ton for the first time. Increased purchases by central banks and geopolitical and trade tensions are the other factors expected to help the yellow metal sustain the upswing in gold prices.
AEM offers a dividend yield of 1% at the current stock price. It has a five-year annualized dividend growth rate of 3.2%. AEM has a payout ratio of 27% (a ratio below 60% is a good indicator that the dividend will be sustainable).
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 third-quarter 2025 earnings has also been revised upward over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $7.14, suggesting year-over-year growth of 68.8%. Earnings are expected to grow roughly 50% in the third quarter.
Agnico Eagle Stock Trades at a Premium
Agnico Eagle is currently trading at a forward price/earnings of 22.57X, a roughly 37.1% premium to the industry average of 16.46X. AEM is also trading at a premium to its gold mining peers, Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of D. Barrick Mining, Newmont and Kinross Gold have a Value Score of B, each.
AEM’s P/E F12M Vs. Industry, B, NEM & KGC
Final Thoughts: Buy AEM Shares
AEM offers an attractive investment opportunity in the gold mining space, backed by a robust pipeline of growth projects, a strong financial footing and supportive technical trends. Surging gold prices are expected to further enhance profitability and strengthen cash flow generation. The company’s positive earnings growth outlook and upward-trending earnings estimates add to its appeal. While AEM trades at a premium, the valuation is well-supported by its strong fundamentals and earnings potential. 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.