Agnico Eagle Earnings: Very Strong Due to the Elevated Gold Price

Key Morningstar Metrics for Agnico Eagle Mines

• Fair Value Estimate
  : C$130.00
• Morningstar Rating
  : ★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : High

What We Thought of Agnico Eagle Mines’ Earnings

Agnico Eagle Mines AEM sold slightly fewer ounces in the first quarter than a year ago, contributing to higher unit costs, but a stronger gold price more than offset these headwinds. Adjusted NPAT rose 120% to USD 1.7 billion, or USD 3.40 per share. It declared a USD 0.45 quarterly dividend, up 13%.

Why it matters: Guidance is reiterated, and the result is tracking in line with our full-year estimates.

The bottom line: We retain no-moat Agnico Eagle’s fair value estimate. Shares trade around double our intrinsic assessment, with the market likely pricing in a continuation of the gold bull market driven by procyclical investment demand and generally price-insensitive central bank purchases.

• This sees spot gold trade at around USD 4,600 per ounce, but we are more cautious in the longer term. High prices incentivize new mined and recycled supply—as illustrated by Agnico recently accelerating investment in its internal growth pipeline—and reduce demand.
• We assume a mid-cycle price from 2030 of about USD 2,050. This is based on our estimate of the long-run marginal cost of production, as the gold price returns to being driven by the fundamentals of supply and demand.

Big picture: We forecast sales of 3.4 million ounces in 2026, similar to 2025, increasing to around 4.0 million ounces midcycle, likely leading to midcycle margins higher than they have been historically. But a lower gold price more than offsets this, and we estimate a five-year NPAT CAGR of negative 13%.

Between the lines: Similar to many of its peers, Agnico is also utilizing a strong balance sheet—net cash was USD 2.9 billion at quarter-end—to increase cash returns to shareholders. It intends to renew its share repurchase program later this month and double it to USD 2 billion.

• However, we think further increases to the quarterly dividend and/or investing in its internal growth pipeline will create more value than share repurchases. The very strong gold price is already more than reflected in its shares.