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Analysts’ Favorites: A Look at the Top 10 Gold Miners

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Part 3
Analysts’ Favorites: A Look at the Top 10 Gold Miners PART 3 OF 11

Where Agnico Eagle Mines Ranks among Gold Miners

Analyst ratings for AEM

Agnico Eagle Mines (AEM) is a Canadian gold miner that has eight mines located in Canada, Finland, and Mexico. Of the 16 Wall Street analysts that cover this stock, 63% recommended a “buy” for this stock, another 25% rated it as a “hold,” and 13% of these analysts recommended a “sell.” 

The implied upside for the stock based on its current target price of $56.06 is 24.0%. Its close peers Kinross Gold (KGC), Yamana Gold (AUY), and New Gold (NGD) have “buy” ratings of 44%, 43%, and 25%, respectively. 

Where Agnico Eagle Mines Ranks among Gold Miners

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Agnico Eagle Mines’ target price has seen an upward revision of 9.5% in 2017 alone, mostly due to the strength in precious metal prices followed by the stock price increase.

Returns for AEM

Agnico Eagle has returned 7.6% year-to-date (or YTD) through the end of September. While the performance of its peers (GDX) (GDXJ) has been quite varied, on an average, it has outperformed its peers. Its operational performance in 2017 has been quite strong. 

In its latest 2Q17 results, AEM beat market expectations on revenues and earnings. The company has a strong and consistent execution record.

Valuations

Among the intermediate gold miners, Agnico has the highest forward EV-to-EBITDA1 multiple of 12.4x. This multiple represents a premium of 35% to its close peers. 

The company also has the highest EBITDA margin and a strong project pipeline. It is also one of the best-managed companies, which can justify the premium to its peers.

  1. enterprise value to earnings before interest, tax, depreciation, and amortization
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