Agnico Eagle Mines Limited’s AEM shares have lost 31.4% in the past three months, pulled down by the sharp retreat in gold prices on inflation worries stemming from tensions in the Middle East, notwithstanding the company’s solid earnings outperformance.
AEM has underperformed the Zacks Mining – Gold industry’s 25.7% decline and the S&P 500’s rise of 9%. Its gold mining peers, Newmont Corporation NEM, Barrick Mining Corporation B and Kinross Gold Corporation KGC have lost 18.6%, 14.3% and 27.9%, respectively, over the same period.
AEM’s 3-month Price Performance
AEM stock broke below the 200-day simple moving average (SMA) on May 15, 2026, amid a pullback in gold prices. The stock has also been trading below the 50-day SMA since April 21, 2026. Following a death crossover on June 18, 2026, the 50-day SMA is lower than the 200-day SMA, indicating a bearish trend.
Agnico Eagle’s Shares Trade Below 50-Day SMA
Let’s take a look at AEM’s fundamentals to better analyze how to play the stock.
Advancement of Key Projects to Drive AEM’s Growth
Agnico Eagle is focused on executing projects that are expected to provide additional growth in production and cash flows. It is advancing its key value drivers and pipeline projects, including the Odyssey project in the Canadian Malartic Complex, Detour Lake, Hope Bay, Upper Beaver and San Nicolas.
The Hope Bay Project, with proven and probable mineral reserves of 3.4 million ounces, is expected to play a significant role in generating cash flow in the years to come. AEM advanced site preparations for a potential project redevelopment in the first quarter of 2026. At Canadian Malartic, Agnico Eagle is advancing the transition to underground mining with the construction of the Odyssey mine and executing other opportunities to beef up annual production. Production from East Gouldie commenced from the ramp in the first quarter.
Drilling at the Marban deposit, added through the acquisition of O3 Mining, focuses on mineral reserve and mineral resource expansion. AEM also continued to work on a feasibility study at San Nicolas. At Detour Lake, AEM advanced the development of the exploration ramp during the first quarter. Development activities also advanced at Upper Beaver, which has the potential to produce 200,000-225,000 ounces of gold and 3,600 tons of copper annually.
AEM’s Capital Allocation Backed by Solid Financial Health
AEM has a robust liquidity position and generates substantial cash flows, which enable it to maintain a strong exploration budget, finance a strong pipeline of growth projects, pay down debt and drive shareholder value. Its operating cash flow for full-year 2025 was a record $6.8 billion, driven by operational efficiencies. Operating cash flow was roughly $1.3 billion in the first quarter, up around 29% from the year-ago quarter.
AEM’s first-quarter free cash flow climbed 23% year over year to roughly $732 million. The upside was backed by higher realized gold prices and robust operational results. Higher realized prices are expected to continue to boost AEM’s profitability and drive cash flow generation.
While gold prices have experienced a significant downward correction after reaching peak levels in January 2026, they remain at supportive levels. Heightened geopolitical tensions, a weaker U.S. dollar, tariff-related concerns and concerns surrounding the Federal Reserve’s independence had driven bullion to a record high of nearly $5,600 per ounce in late January. Since then, gold pulled back sharply due to inflation concerns triggered by a surge in crude oil prices amid Middle East tensions, with prices falling to $4,500 per ounce around the end of May.
Bullion continued to retreat in June, with prices slipping below $4,000 per ounce to a near eight-month low on rate hike expectations and a stronger greenback despite reduced inflation concerns following the interim agreement between the United States and Iran. Meanwhile, the Fed held interest rates steady in the latest policy meeting, but signaled a potential rate increase before the year's end.
Gold prices are edging up lately on concerns over the renewed U.S.-Iran conflict, spurring inflation risks from potential disruptions in energy supplies. Bullion is up roughly 23% year over year and is currently trading above $4,100 per ounce.
Meanwhile, the company remains focused on paying down debt using excess cash, with total long-term debt reducing by roughly $950 million in 2025. It had a long-term debt of $197 million at the end of the first quarter. It ended the quarter with a significant net cash position of roughly $2.9 billion, driven by an increase in cash.
AEM also returned around $1.4 billion to its shareholders in 2025 and $375 million in the first quarter through dividends and share buybacks. It raised the quarterly dividend by 12.5% to 45 cents per share. AEM offers a dividend yield of 1.2% at the current stock price. It has a five-year annualized dividend growth rate of 2.7%. AEM has a payout ratio of 18%.
Higher Costs Weigh on Agnico Eagle Stock
Agnico Eagle remains exposed to higher production costs. Its all-in-sustaining costs (AISC) — a critical cost metric for miners — were $1,483 per ounce in the first quarter, marking a roughly 26% year-over-year rise, impacted by higher total cash costs and an uptick in sustaining capital expenditures. Total cash costs per ounce for gold were $1,093, 22% higher than $895 a year ago. Total cash costs rose due to increased royalty costs and lower production.
AEM forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges.
AEM’s Earnings Estimates Southbound
The Zacks Consensus Estimate for AEM’s 2026 earnings has been going down over the past 60 days. The consensus estimate for second-quarter 2026 earnings has also been revised lower over the same time frame.
The Zacks Consensus Estimate for 2026 earnings is currently pegged at $13.02, suggesting year-over-year growth of 57.3%. Earnings are expected to grow roughly 61.9% in the second quarter.
Agnico Eagle Stock Trades at a Premium
Agnico Eagle is currently trading at a forward 12-month earnings multiple of 10.89, a roughly 21.9% premium to the peer group average of 8.93X. AEM is also trading at a premium to Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of C. Barrick Mining and Newmont have a Value Score of B, each, while Kinross Gold has a Value Score of A.
AEM’s P/E F12M Vs. Industry, B, NEM & KGC
Final Thoughts: Hold Onto AEM Shares
AEM offers an attractive investment opportunity in the gold mining space, backed by a robust pipeline of growth projects and a strong financial footing. Still-favorable gold prices are also expected to enhance profitability further and strengthen cash flow generation. The company’s positive earnings growth outlook and an ultra-low debt profile are the other positives. However, its high production costs warrant caution. AEM’s stretched valuation might not offer an attractive entry point at this time. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).