Key Takeaways
- Agnico Eagle jumped 10% today, along with Wheaton Precious Metals, Newmont and Barrick Mining, as gold climbed 3% after the Democrats’ midterm win.
- At Agnico’s third-quarter costs, a 3% rise in gold adds about 5% to its margin per ounce, which is half the stock’s gain.
- Agnico’s costs per ounce rose 24% from a year earlier, while Newmont is lowering its cost guidance.
- Agnico still trades below its five-year average forward P/E, but it needs gold to hold its gains.
Agnico Eagle Mines (AEM) stock jumped 10% today with no news of its own. Gold climbed 3% this morning as the dollar fell to a one-month low after Democrats won both the House and the Senate.
Wheaton Precious Metals (WPM) runs no mines, so it carries none of their rising costs, and it led with a 12% gain. Newmont (NEM) rose 9%. Barrick Mining (B), the highest-cost miner of the three, rose 8%.
Costs are taking a bite
Agnico’s all-in sustaining costs (AISC) were $1,648 an ounce in the third quarter, up 24% from $1,331 a year earlier, and management blamed diesel and tariffs.
At the quarter’s $4,264 realized gold price, Agnico kept about $2,616 an ounce over AISC. A 3% rise in gold adds about $128 to that, or about 5%. The stock rose twice as much.
Analysts expected free cash flow to dip from $4.40 billion in 2025 to $4.13 billion this year, then reach $4.78 billion in 2027:
Analysts set those before today’s gold move, so they should rise if gold holds.
Newmont is getting the same lift with its costs heading the other way. Its AISC was $1,454 an ounce in the third quarter, and it lowered its full-year AISC guidance to $1,520. So Newmont keeps more of each extra dollar on gold.
Barrick’s AISC was $1,866 an ounce in the second quarter, up 11% from a year earlier. Its stock rose the least, and I suspect copper is part of it: Barrick mined 56,000 tonnes of it in the second quarter. Its third-quarter report, due early next week, will show whether fuel kept pushing its costs up.
TIKR tracks 22 analysts on Agnico Eagle Mines. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Agnico Eagle Mines, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Agnico Eagle Mines’ Analyst Ratings
Still cheaper than usual
Agnico’s forward P/E was 14.8x before today’s move, well below its five-year average of 20.5x:
At today’s price it’s about 16x.
Agnico isn’t expensive, but investors paid up today for more than the gold move adds to its margins. It needs gold to hold. Its fourth-quarter report early next year will show how much diesel added.
So what is Agnico Eagle stock actually worth?
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Disclaimer:
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