Agnico Eagle (AEM) AI Stock Analysis

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Agnico Eagle

(TSX:AEM)

80Outperform

Agnico Eagle demonstrates strong financial health with impressive revenue growth and efficient cash flow management, supported by strategic cost control and reduced debt. Technical analysis suggests stable momentum, while the earnings call reflects positive future prospects despite slight production guidance reductions. Valuation appears reasonable, maintaining shareholder appeal.

Positive Factors

Debt Reduction

Net debt reduced significantly as at 31-Dec-24, with Q4’24 free cash flow reported as a solid $570m.

Operational Growth

Fleet expansion is warranted, reflecting confidence in increased demand and operational capacity.

Stock Target Increase

Increasing target to C$158.00 for Agnico Eagle Mines Limited indicates a positive outlook.

Negative Factors

Financial Performance

Agnico Eagle Mines (AEM) reported a Q4’24 earnings beat on lower taxes and depreciation.

Agnico Eagle (AEM) vs. S&P 500 (SPY)

Market Cap

$71.73B

Dividend Yield1.59%

Average Volume (3M)1.26M

Price to Earnings (P/E)27.3

Beta (1Y)1.14

Revenue Growth26.99%

EPS Growth-6.63%

CountryCA

Employees10,125

SectorBasic Materials

Sector Strength52

IndustryGold

Share Statistics

EPS (TTM)5.20

Shares Outstanding505,539,430

10 Day Avg. Volume1,246,815

30 Day Avg. Volume1,259,791

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)6.28

Price to Cash Flow (P/CF)11.30

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$170.25

Price Target Upside19.31% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering13

Agnico Eagle Business Overview & Revenue Model

Company DescriptionAgnico Eagle Mines Limited (AEM) is a leading Canadian gold mining company with operations primarily in Canada, Finland, and Mexico. The company focuses on the exploration, development, and production of gold, along with some silver, copper, zinc, and lead as by-products. Agnico Eagle is known for its commitment to safe, environmentally responsible mining and aims to deliver consistent value to shareholders through its strategic investments and efficient operations.

How the Company Makes MoneyAgnico Eagle makes money primarily through the extraction and sale of gold, which is its main product. Revenue is generated by mining gold ore, processing it to extract gold, and then selling the refined gold on the global market. The company operates several mines, which provide a steady stream of gold production. In addition to gold, Agnico Eagle also earns revenue from the sale of by-products such as silver, copper, zinc, and lead, which are extracted during the gold mining process. The company's revenue is influenced by factors such as global gold prices, production output, and operational efficiency. Agnico Eagle also benefits from strategic partnerships and joint ventures that enhance its mining capabilities and resource base.

Agnico Eagle Financial Statement Overview

Summary

Agnico Eagle exhibits strong financial performance characterized by robust revenue and profit growth, solid balance sheet management, and efficient cash flow generation. The strategic focus on cost management and equity strengthening positions it well within the mining industry.

Income Statement

Very Positive

Agnico Eagle has demonstrated strong revenue growth with a significant increase from $3.8 billion in 2021 to $8.3 billion in 2024. Gross profit margin is notable, indicating efficient cost management. While EBIT margin calculation is not possible for 2024 due to zero EBIT, EBITDA margin remains robust. Consistent net income over the years enhances the overall profitability outlook.

Balance Sheet

Positive

The company's debt-to-equity ratio shows a healthy leverage position, with total debt decreasing over time. The equity ratio is strong, reflecting a solid equity base. Return on equity increased significantly in recent years, showcasing effective use of shareholder funds. However, fluctuations in total assets and liabilities suggest potential risks in asset management.

Cash Flow

Very Positive

Operating cash flow has increased steadily, supporting substantial free cash flow growth. The free cash flow to net income ratio is favorable, indicating efficient conversion of income into cash. Despite high capital expenditures, the company maintains positive cash flow from operations, underscoring financial stability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
8.29B	6.63B	5.74B	3.82B	3.14B
	Gross Profit
3.69B	3.72B	2.00B	1.33B	1.08B
	EBIT
0.00	3.25B	1.33B	1.01B	777.31M
	EBITDA
4.42B	4.05B	2.27B	1.75B	1.57B
	Net Income Common Stockholders
1.90B	1.94B	670.25M	561.95M	511.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
933.74M	348.85M	658.63M	191.07M	406.46M
	Total Assets
29.99B	28.68B	23.49B	10.19B	9.61B
	Total Debt
1.28B	2.00B	1.49B	1.70B	1.69B
	Net Debt
355.75M	1.67B	834.79M	1.51B	1.28B
	Total Liabilities
9.15B	9.26B	7.25B	4.21B	3.93B
	Stockholders Equity
20.83B	19.42B	16.24B	5.98B	5.68B
Cash Flow		Free Cash Flow
2.13B	953.66M	558.40M	398.31M	432.71M
	Operating Cash Flow
3.96B	2.65B	2.10B	1.32B	1.19B
	Investing Cash Flow
-2.01B	-2.81B	-710.46M	-1.23B	-808.81M
	Financing Cash Flow
-1.36B	-163.96M	-914.85M	-297.24M	-302.82M

Agnico Eagle Technical Analysis

Technical Analysis Sentiment

Positive

Last Price142.70

Price Trends

50DMA

143.51

Positive

100DMA

130.78

Positive

200DMA

118.70

Positive

Market Momentum

MACD

4.18

Negative

RSI

70.96

Negative

STOCH

80.47

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AEM, the sentiment is Positive. The current price of 142.7 is below the 20-day moving average (MA) of 150.05, below the 50-day MA of 143.51, and above the 200-day MA of 118.70, indicating a neutral trend. The MACD of 4.18 indicates Negative momentum. The RSI at 70.96 is Negative, neither overbought nor oversold. The STOCH value of 80.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AEM.

Agnico Eagle Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEM	80 Outperform	$71.73B	27.31	9.42%	1.59%	26.99%	-6.63%
K	80 Outperform	$22.60B	17.37	14.66%	1.02%	23.38%	131.87%
ELD	79 Outperform	$4.59B	11.45	8.12%	―	33.06%	177.69%
ABX	73 Outperform	$43.20B	14.98	9.00%	2.31%	15.40%	72.49%
NGD	73 Outperform	$3.37B	24.28	11.14%	―	18.32%	―
SSL	68 Neutral	$2.88B	148.94	1.00%	0.83%	-0.35%	-65.11%
Sector *	47 Neutral	$2.43B	-2.83	-21.77%	3.74%	4.16%	-28.83%

* Basic Materials Sector Average

Performance Comparison

TSE:AEM

Agnico Eagle

149.29

67.13

81.72%

TSE:SSL

Sandstorm Gold

10.20

2.73

36.49%

TSE:K

Kinross Gold

18.37

9.75

113.13%

TSE:NGD

New Gold

4.56

2.08

83.87%

TSE:ABX

Barrick Gold

26.53

2.59

10.80%

TSE:ELD

Eldorado Gold

24.12

3.20

15.30%

Agnico Eagle Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: 0.19% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Positive

Agnico Eagle had an exceptionally strong year in 2024 with record financial and operational performance, robust cost management, and significant exploration success. Despite a minor revision in production guidance and challenges at Pinos Altos, the company is well-positioned for future growth and increased shareholder returns.

Highlights

Record Financial Performance

Agnico Eagle reported record financial results in 2024, including record revenue of $2.2 billion, record adjusted earnings of $632 million, and record operating cash flow of over $1.1 billion.

Strong Gold Production

The company achieved record annual gold production, with 3.49 million ounces produced in 2024, surpassing the midpoint of their guidance.

Robust Cost Management

Agnico Eagle maintained strong cost control, with total cash costs of $903 per ounce and all-in sustaining costs of $1,239 per ounce, both within their guided range.

Exploration and Expansion Success

Significant exploration investments led to promising results, including the discovery of Patch 7 at Hope Bay, contributing to an increase in mineral resources.

Debt Reduction and Strong Balance Sheet

The company reduced net debt significantly from $1.5 billion at the start of 2024 to $217 million by year-end, strengthening their balance sheet.

Shareholder Returns

Agnico Eagle returned approximately $2.2 billion to shareholders in 2024 through dividends, share buybacks, and debt reduction.

Lowlights

Production Guidance Reduction

Production guidance for 2025-2026 was revised down by 2.9% due to ground conditions at Pinos Altos and other minor deferrals.

Challenges at Pinos Altos

Pinos Altos faced operational challenges due to its maturity and the complexity of mining at the extremities of the ore body.

Company Guidance

During the Agnico Eagle Mines Limited Q4 2024 conference call, the company provided optimistic guidance for 2025 and beyond, focusing on various growth projects and financial strategies. They highlighted potential gold production increases at Malartic and Detour to over a million ounces per year, and a 50% growth in their Ontario platform. The company also achieved record financial results in 2024, with annual gold production reaching 3.49 million ounces and record earnings of $632 million in Q4. Agnico Eagle reduced net debt from $1.5 billion to $217 million and returned $920 million directly to shareholders through dividends and share buybacks. For 2025, they projected a slight 2.9% decline in production guidance but emphasized strong cost control and ongoing investments in exploration and development, maintaining a cash cost guidance of $903 per ounce and all-in sustaining costs of $1,239 per ounce.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.