Rising commodity prices have driven some basic materials stocks to stretched valuations, with three miners among the costliest Canadian stocks covered by Morningstar. Two are Canada’s leading gold miners, while the other is a copper mining giant.
Precious and base metal stocks make up roughly 75% of Canada’s basic materials sector. A strong rally in gold and copper prices has propelled these stocks higher, lifting the Morningstar Canada Basic Materials Target Market Exposure Index more than 43% over the past year, significantly outperforming the over 23% gains for the broader Morningstar Canada Index, as of Sept. 9. As a result, mining stocks including Agnico Eagle Mines and Kinross Gold have gotten seriously overvalued.
3 Overvalued Mining Stocks
How We Screened for Overvalued Stocks
We combed through Canadian stocks covered by Morningstar equity analysts and identified those with 1-star ratings, meaning they’re trading significantly above their fair value estimates. We picked the names trading at the highest premiums to their fair value estimates. All three stocks have been assigned no-moat ratings by Morningstar analysts because these businesses operate in a capital-intensive industry and lack cost advantages.
Agnico Eagle Mines
- Fair Value Estimate: C$125.00
- Price/Fair Value: 2.24
- Economic Moat: None
- Capital Allocation Rating: Standard
- Morningstar Rating: ★
Agnico Eagle is one of the world’s largest gold miners by production, with operations in Canada, Mexico, Finland, and Australia. Its Canadian mines collectively represented nearly 60% of the company’s sales of 3.4 million ounces of gold last year. The miner had about 15 years of gold reserves at the end of 2025.
Agnico Eagle stock has risen over 29% over one year. At its current price of C$277.89, the stock is trading at a premium of 118% to its C$125.00 fair value estimate.
“The company has numerous development projects that will likely see it materially increase production by the early-to-mid-2030s,” says Morningstar equity analyst Jon Mills, who covers mining companies. He forecasts gold sales volumes to increase to around 4.0 million ounces from 3.4 million in 2025, led by expansions at its Canadian mines.
The strength of the miner’s balance sheet is underpinned by its USD 3.3 billion in net cash at the end of June 2026. “We think its balance sheet will remain in a net cash position over our forecast period, which is appropriate given operating leverage and exposure to cyclical gold prices,” explains Mills.
Read more about Agnico Eagle Mines.
Kinross Gold
- Fair Value Estimate: C$13.30
- Price/Fair Value: 3.14
- Economic Moat: None
- Capital Allocation Rating: Standard
- Morningstar Rating: ★
Kinross’ production is split between the Americas (75%) and West Africa (25%). The Canadian miner’s assets in Brazil and Mauritania accounted for about 55% of the roughly 2 million gold equivalent ounces it sold in 2025.
The stock gained about 25% over the past year and is currently trading at C$40.80 per share, putting it at a 201% premium to its fair value estimate of C$13.30.
A strong balance sheet boosts the company’s capacity to develop new mines and expand existing assets, according to Mills. “The elevated gold price means it is currently highly profitable, allowing it to move into a net cash position of USD 1.9 billion at the end of June 2026 from net debt of USD 2.2 billion at the end of December 2022,” he says.
However, Mills notes that elevated gold prices are temporary while basing his forecasts on assumed midcycle gold prices of about USD 2,050 per ounce from 2030. “Along with the gold price returning to being driven by the fundamentals of supply and demand, this drives our view that earnings will fall by a negative compound annual growth rate of 20% over our five-year forecast period,” he adds.
Read more about Kinross Gold.
Teck Resources
- Fair Value Estimate: C$ 51.00
- Price/Fair Value: 1.91
- Economic Moat: None
- Capital Allocation Rating: Standard
- Morningstar Rating: ★
Teck is primarily a copper producer but also owns zinc-mining assets across Canada, the United States, Chile, and Peru.
Strong copper demand from China and data center proliferation have benefited Teck. The miner’s stock has soared over 59% over the past year and is trading at C$91.75, implying a 79% premium to its C$51.00 fair value estimate.
Mills points out that the stock’s ascent is underpinned by “the copper price trading near historical highs at about USD 6.20 per pound, significantly above our USD 3.80 long-term or midcycle assumption from 2030.”
Teck is in sound financial health, with booming copper prices helping offset balance sheet weakness stemming from significant capital expenditures on the Quebrada Blanca 2 mine in Chile, Mills notes. The miner reported net cash of about C$ 1.2 billion at the end of June 2026. “We expect the balance sheet to remain strong over our five-year forecast period,” he says.
In September 2025, UK-based miner Anglo American NGLOY agreed to buy Teck to form Anglo Teck. The deal is likely to close in late 2026 or early 2027. “While Anglo Teck will be one of the world’s largest copper miners, producing around 1 million metric tons (its share) in 2028, this is only about 4% of global mined production,” says Mills.
Read more about Teck Resources.
