10) Agnico Eagle Mines Limited (NYSE:AEM)
5-Year Revenue Growth: ~27.9%
Average Upside Potential: ~31.5%
Market cap as of 12 November: $38.5 billion
Agnico Eagle Mines Limited (NYSE:AEM) is a gold producer. It focuses on the exploration, development, and expansion of its gold properties mainly from underground operations.
Agnico Eagle Mines Limited (NYSE:AEM)’s focus on operational performance, cost control, and capital discipline should result in long-term growth. The company targets realizing the full potential of its assets with the help of continuous improvement and by advancing its pipeline of projects and supplemental exploration program.
Wall Street analysts are optimistic about Agnico Eagle Mines Limited (NYSE:AEM)’s pipeline projects. For example, in Q3 2024, the company advanced site preparation for the underground project, which includes the completion of a pad that will host the surface infrastructure for the underground project as well as the removal of the overburden for the portal. Agnico Eagle Mines Limited (NYSE:AEM) continues to focus on the expansion plan for the Detour Lake mine.
The expansion project is a low-risk one because of factors such as a favorable location in an established mining jurisdiction and current infrastructure which can support increased production. Agnico Eagle Mines Limited (NYSE:AEM)’s financial strategy consists of enhancing the balance sheet via strategic investments and preparing for further growth opportunities. The expansion will also result in higher production volumes, which can result in lower per-ounce costs. This will ultimately enhance profitability and cash flow generation.
Analysts at UBS Group initiated coverage on the shares of Agnico Eagle Mines Limited (NYSE:AEM) on 17th September. They gave a “Buy” rating and a price target of $95.00. Alluvium Asset Management, an asset management company, released its Q2 2024 investor letter. Here is what the fund said:
“Our gold miners had quite divergent performance, Agnico Eagle Mines Limited (NYSE:AEM) was up 11.4%, but Regis Resources was down 12.9%. They both provided quarterly updates. Regis reported business disruptions due to poor weather, but management maintained its output and cost guidance. It also announced the approval of two underground projects that will add around 25% to production levels from 2027, but they will cost circa AUD 150m. Agnico reported more positive results and reiterated guidance. We have revised our long term gold price and exchange rate assumptions (which remain conservative). On our earnings based models we still view Regis as cheap and Agnico as expensive. But that ignores management, and, to a large extent, growth prospects. And when we consider those factors the equation looks decidedly more balanced. So despite Regis trading at an even larger discount to our valuation we have not bought more, and despite Agnico trading at an even larger premium to our valuation, we have not recently sold any. The Fund’s combined position in these gold miners is 6.6%.”
