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Agnico Eagle Mines Is on Many Analysts’ Wish Lists—Here’s Why

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Analyst ratings for AEM

Agnico Eagle Mines (AEM) is a Canadian gold miner that has eight mines located in Canada, Finland, and Mexico. According to the consensus collected by Thomson Reuters, 17 analysts currently cover AEM’s stock, 59% of which recommend a “buy.” Another 35% recommend a “hold” for the stock, while only 6% recommend a “sell.”

The implied upside for AEM stock based on its current target price of $55.6 is 30.7%. Close peers (GDXJ) Yamana Gold (AUY), New Gold (NGD), and Kinross Gold (KGC) have “buy” ratings from 36%, 31%, and 40% of their analysts, respectively.

There hasn’t been any drastic change in the company’s percentage recommendations nor in its target prices over the past year.

Returns for AEM

Agnico Eagle stock has risen 1.3% YTD (year-to-date). While this seems like a small positive return, it’s still significant at a time when most of its peers (GDX) (GDXJ) have seen negative returns. Its strong operational performance in 2017 and its strong and consistent execution record have helped the company outperform most of its peers YTD.

Valuations

Among intermediate gold miners, Agnico has the highest forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 10.6x. Its current multiple reflects a premium of 66% to its close peers.

AEM’s EBITDA margin is also the strongest in its group, and its healthy project pipeline and consistent execution have helped the company’s stock thus far.

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