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Will Rising Unit Costs Dull Agnico Eagle Mines' Earnings Shine?
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Key Takeaways
Agnico Eagle reported better-than-expected Q1 earnings but faced headwinds from higher costs.
AEM expects 2026 AISC of $1,400-$1,550 per ounce, up from 2025 as cost pressures persist.
Shares have gained 8.4% in the past six months, with EPS estimates for 2026 and 2027 trending lower.
Agnico Eagle Mines Limited (AEM - Free Report) delivered forecast-topping earnings performance in the first quarter on gold price strength, but it remains exposed to headwinds from higher costs. Its all-in sustaining cost (AISC) — the most important cost metric of miners — was $1,483 per ounce in the quarter, marking a roughly 26% year-over-year rise.
AISC increased year over year due to higher total cash costs and an uptick in sustaining capital expenditures. Total cash costs per ounce for gold were $1,093, 22% higher than $895 a year ago. Total cash costs rose due to increased royalty costs and lower production.
While Agnico Eagle is taking action to control costs, the inflationary pressure is likely to continue, weighing on its overall financial performance. Maintaining cost discipline to sustain margin expansion will be crucial for the company.
AEM forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges. Cash costs are expected to increase in 2026, partly due to higher royalty costs, cost inflation (including higher labor and electricity costs) and lower grades across certain mines. Higher production costs warrant caution, as they will likely weigh on AEM’s profitability.
Among AEM’s peers, Barrick Mining Corporation (B - Free Report) saw a 4% year-over-year decline in AISC in the first quarter, reaching $1,708 per ounce. It, however, rose 8% sequentially. For 2026, Barrick projects AISC in the range of $1,760-$1,950 per ounce, indicating a significant year-over-year increase at the midpoint compared with $1,637 in 2025. Barrick forecasts cash costs per ounce to be $1,330-$1,470, up from $1,199 in 2025.
Kinross Gold Corporation (KGC - Free Report) saw higher production costs in the March quarter. KGC’s first-quarter attributable AISC was $1,732 per ounce, marking a 28% increase from the year-ago quarter. Kinross expects AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase from $1,571 per ounce in 2025, partly due to inflationary impacts.
The Zacks Rundown for AEM
Shares of Agnico Eagle have gained 8.4% in the past six months compared with the Zacks Mining – Gold industry’s rise of 14.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 13.1, a roughly 22.9% premium to the industry average of 10.66X. It carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AEM’s 2026 and 2027 earnings implies a year-over-year rise of 58.7% and 1.9%, respectively. The EPS estimates for 2026 and 2027 have been trending lower over the past 60 days.
Image Source: Zacks Investment Research
AEM stock currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Will Rising Unit Costs Dull Agnico Eagle Mines' Earnings Shine?
Key Takeaways
Agnico Eagle Mines Limited (AEM - Free Report) delivered forecast-topping earnings performance in the first quarter on gold price strength, but it remains exposed to headwinds from higher costs. Its all-in sustaining cost (AISC) — the most important cost metric of miners — was $1,483 per ounce in the quarter, marking a roughly 26% year-over-year rise.
AISC increased year over year due to higher total cash costs and an uptick in sustaining capital expenditures. Total cash costs per ounce for gold were $1,093, 22% higher than $895 a year ago. Total cash costs rose due to increased royalty costs and lower production.
While Agnico Eagle is taking action to control costs, the inflationary pressure is likely to continue, weighing on its overall financial performance. Maintaining cost discipline to sustain margin expansion will be crucial for the company.
AEM forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges. Cash costs are expected to increase in 2026, partly due to higher royalty costs, cost inflation (including higher labor and electricity costs) and lower grades across certain mines. Higher production costs warrant caution, as they will likely weigh on AEM’s profitability.
Among AEM’s peers, Barrick Mining Corporation (B - Free Report) saw a 4% year-over-year decline in AISC in the first quarter, reaching $1,708 per ounce. It, however, rose 8% sequentially. For 2026, Barrick projects AISC in the range of $1,760-$1,950 per ounce, indicating a significant year-over-year increase at the midpoint compared with $1,637 in 2025. Barrick forecasts cash costs per ounce to be $1,330-$1,470, up from $1,199 in 2025.
Kinross Gold Corporation (KGC - Free Report) saw higher production costs in the March quarter. KGC’s first-quarter attributable AISC was $1,732 per ounce, marking a 28% increase from the year-ago quarter. Kinross expects AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase from $1,571 per ounce in 2025, partly due to inflationary impacts.
The Zacks Rundown for AEM
Shares of Agnico Eagle have gained 8.4% in the past six months compared with the Zacks Mining – Gold industry’s rise of 14.1%.
From a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 13.1, a roughly 22.9% premium to the industry average of 10.66X. It carries a Value Score of C.
The Zacks Consensus Estimate for AEM’s 2026 and 2027 earnings implies a year-over-year rise of 58.7% and 1.9%, respectively. The EPS estimates for 2026 and 2027 have been trending lower over the past 60 days.
AEM stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.