Agnico Eagle (AEM) Hits 52-Week High: What's Driving It?

Shares of Agnico Eagle Mines Limited AEM scaled a fresh 52-week high of $61.82 on Aug 23, before closing the session at $61.58.

The company has a market cap of roughly $14.6 billion. Average volume of shares traded in the past three months was around 1,517.9K.  

The stock has surged 52.4% in the past year compared with the industry’s 49.9% rally.

What’s Driving the Rally?

Strong second-quarter results as well as upbeat outlook for Meliadine and Amaruq projects have contributed to the gain in Agnico Eagle’s shares.

The company logged profits of $27.8 million or 12 cents per share in second-quarter 2019, up from $5 million or 2 cents in the year-ago quarter. Also, adjusted earnings per share of 10 cents topped the Zacks Consensus Estimate of 2 cents.

Agnico Eagle reaffirmed production and cost guidance for 2019. Gold production for the year is projected at 1.75 million ounces, which includes pre-commercial production from Meliadine and Amaruq.

Notably, the Meliadine project started commercial production in May 2019. The company is ramping production at Meliadine, which is expected to produce roughly 230,000 ounces of gold in 2019, including the pre-commercial production ounces. Moreover, it is on track for the Amaruq project expansion, which is scheduled to start commercial production in the third quarter of 2019.

At the end of the second quarter, the company processed a test batch of low-grade Amaruq ore in the Meadowbank mill, which confirmed ore characteristics and recoveries. Production guidance for 2019 for the Meadowbank complex remains unchanged at 230,000 ounces of gold. This includes 95,000-to-105,000 ounces from Meadowbank.

Earnings estimates for Agnico Eagle for 2019 have also moved up in the past month. Over this period, the Zacks Consensus Estimate for the year has increased by 8.1%. The Zacks Consensus Estimate for 2019 earnings is currently pegged at 80 cents per share, reflecting an expected year-over-year growth of 157.4%. The same for the second quarter stands at 26 cents, suggesting a significant rise from a penny reported in the year-ago quarter.   

Agnico Eagle Mines Limited Price and Consensus


Agnico Eagle Mines Limited Price and Consensus

Agnico Eagle Mines Limited price-consensus-chart | Agnico Eagle Mines Limited Quote


Zacks Rank & Other Key Picks

Agnico Eagle currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Alamos Gold Inc AGI and Arconic Inc ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 150% for 2019. The company’s shares have surged 55.2% in the past year.

Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 103% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 44.2% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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