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Agnico Eagle Mines Ltd AEM

Morningstar Rating
$49.62 +1.56 (3.25%)
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Company Report

Agnico Eagle Earnings: Solid Result, Driven by Higher Gold Prices and Sales Volumes

Our fair value estimate for no-moat Agnico Eagle is unchanged at USD 54 per share after its 2023 result was broadly in line with our expectations. Adjusted EBITDA of roughly USD 3.2 billion was modestly higher than our forecast and 20% up on 2022, driven by increased gold sales volumes and price, partially offset by higher unit cash costs. Adjusted net profit after tax of about USD 1.1 billion rose 9% on 2022, affected by additional depreciation and amortization from purchasing the remaining 50% of the Canadian Malartic mine from Yamana Gold in March 2023. Accounting rules mean Agnico revalued its initial 50% stake in Canadian Malartic, contributing to higher depreciation and amortization. Along with the increased share count from this acquisition, EPS was modestly lower than in 2022, at USD 2.24 per share. However, we think accounting earnings don't reflect the company’s underlying performance. Free cash flow per share rose by roughly half, to USD 1.94 per share, a solid result in our view. While Agnico paid a total price for the remainder of Canadian Malartic, we think there are opportunities to expand production while potentially also developing the Wasamac deposit that came with the acquisition.

Price vs Fair Value

AEM is trading at a 11% discount.
Price
$48.06
Fair Value
$91.00
Uncertainty
Medium
1-Star Price
$55.30
5-Star Price
$22.80
Economic Moat
Rcyp
Capital Allocation
Jbypsnhhb

Bulls Say, Bears Say

Bulls

Agnico Eagle has around 15 years of reserves at end December 2023, with various opportunities to incrementally increase gold production in coming years.

Bears

The company’s production sits within the second quartile of the gold cost curve, meaning it is more leveraged to changes in the gold price than its lower-cost competitors.

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News

Trading Information

Previous Close Price
$48.06
Day Range
$47.7349.78
52-Week Range
$43.2261.15
Bid/Ask
$49.63 / $50.00
Market Cap
$24.68 Bil
Volume/Avg
5.0 Mil / 3.0 Mil

Key Statistics

Price/Earnings (Normalized)
22.94
Price/Sales
3.55
Dividend Yield (Trailing)
3.33%
Dividend Yield (Forward)
3.33%
Total Yield
3.40%

Company Profile

Agnico Eagle is a gold miner with mines in Canada, Mexico, Finland, and Australia. Agnico operated just one mine, LaRonde, as recently as 2008 before bringing its other mines online in rapid succession in the following years. It merged with Kirkland Lake Gold in 2022, acquiring the Detour Lake and Macassa mines in Canada along with the high-grade, low-cost Fosterville mine in Australia. It produced more than 3.4 million gold ounces in 2023 and had about 15 years of gold reserves at end 2023. Agnico Eagle is focused on increasing gold production in lower-risk jurisdictions and bought the remaining 50% of its Canadian Malartic mine along with the Wasamac project and other assets from Yamana Gold in 2023.
Sector
Basic Materials
Industry
Gold
Stock Style Box
Large Value
Total Number of Employees
10,420

Competitors

Valuation

Metric
AEM
NEM
KGC
Price/Earnings (Normalized)
22.9420.4211.54
Price/Book Value
1.241.240.99
Price/Sales
3.552.221.43
Price/Cash Flow
8.578.044.10
Price/Earnings
AEM
NEM
KGC

Financial Strength

Metric
AEM
NEM
KGC
Quick Ratio
0.500.710.77
Current Ratio
1.991.252.70
Interest Coverage
32.41−7.976.69
Quick Ratio
AEM
NEM
KGC

Profitability

Metric
AEM
NEM
KGC
Return on Assets (Normalized)
3.66%3.17%4.83%
Return on Equity (Normalized)
5.43%6.24%8.48%
Return on Invested Capital (Normalized)
5.21%4.97%6.14%
Return on Assets
AEM
NEM
KGC
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Economic Moat
Market Cap
ZIJMY
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ZIJMF
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NEM
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GOLD
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FNV
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WPM
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GFI
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GFIOF
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KGC
Kinross Gold CorpXnlz$6.0 Bil

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