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Agnico Eagle Mines Ltd AEM

Morningstar Rating
CAD 73.40 +0.55 (0.76%)
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Company Report

Agnico Eagle Earnings: Higher Prices and Volumes Partially Offset by Increased Costs

No-moat Agnico Eagle’s 2023 third-quarter result met our expectations. Adjusted EBITDA of USD 760 million increased 13% on the same quarter of 2022, driven by higher gold sales volumes and price, partially offset by increased unit cash costs. Adjusted net profit after tax of roughly USD 220 million was similar to last year due to higher depreciation and amortization from the purchase of the remaining 50% of the Malartic mine from Yamana Gold in March 2023. However, the increased share count from this acquisition meant EPS was 10% lower, at USD 0.44 per share. Similar to last year, and consistent with its quarterly dividend payout policy, Agnico will pay a USD 0.40 (roughly CAD 0.56) per share dividend in December. Free cash flow was roughly USD 80 million, down from USD 140 million last year due to increased working capital, likely mostly temporary. The balance sheet is sound. Net debt was USD 1.6 billion at end September 2023, around 0.5 times trailing 12 months EBITDA.

Price vs Fair Value

AEM is trading at a 0% discount.
Price
CAD 73.40
Fair Value
CAD 34.90
Uncertainty
Medium
1-Star Price
CAD 64.65
5-Star Price
CAD 92.87
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Agnico Eagle has around 15 years of reserves at end December 2022, 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
CAD 72.85
Day Range
CAD 72.2673.84
52-Week Range
CAD 59.3682.90
Bid/Ask
CAD 73.35 / CAD 73.44
Market Cap
CAD 36.41 Bil
Volume/Avg
1.9 Mil / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
25.76
Price/Sales
4.13
Dividend Yield
2.95%
Dividend Yield (Forward)
4.00%
Total Yield
2.95%

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 3.1 million gold ounces in 2022 and had about 15 years of gold reserves at end 2022. 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 Core
Total Number of Employees
10,420

Competitors

Valuation

Metric
AEM
NEM
KGC
Price/Earnings (Normalized)
25.7626.9313.99
Price/Book Value
1.351.721.20
Price/Sales
4.132.961.76
Price/Cash Flow
10.539.314.70
Price/Earnings
AEM
NEM
KGC

Financial Strength

Metric
AEM
NEM
KGC
Quick Ratio
0.501.170.77
Current Ratio
1.992.122.70
Interest Coverage
32.41−1.126.69
Quick Ratio
AEM
NEM
KGC

Profitability

Metric
AEM
NEM
KGC
Return on Assets (Normalized)
3.52%3.17%4.83%
Return on Equity (Normalized)
5.22%6.21%8.48%
Return on Invested Capital (Normalized)
5.02%4.92%6.14%
Return on Assets
AEM
NEM
KGC

Gold Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
NEM
Newmont CorpHqn$47.5 Bil
ZIJMY
Zijin Mining Group Co Ltd ADRKvgty$43.8 Bil
ZIJMF
Zijin Mining Group Co Ltd Class HHdygns$43.8 Bil
GOLD
Barrick Gold CorpWrt$30.9 Bil
AEM
Agnico Eagle Mines LtdFcfk$26.8 Bil
WPM
Wheaton Precious Metals CorpDxhd$22.3 Bil
FNV
Franco-Nevada CorpSzy$21.6 Bil
GFI
Gold Fields Ltd ADRBzkgb$13.9 Bil
GFIOF
Gold Fields LtdYrlwlk$13.9 Bil
KGC
Kinross Gold CorpKgmp$7.2 Bil