Agnico Eagle Mines Limited AEM stock looks promising at the moment. The company’s shares have surged more than 43% year to date.
If you haven’t taken advantage of the share price appreciation yet, the time is right for you to add the stock to your portfolio as it is poised to sustain its momentum.
Let’s delve into the factors that make this gold mining company an attractive investment option.
Upbeat 2019 View
In October, the company revised production guidance for 2019. Gold production for the year is now projected in the band of 1.77-1.78 million ounces, up from 1.75 million ounces expected previously. The projection includes pre-commercial production from Meliadine and Amaruq.
Notably, the company’s gold production rose 13% year over year in the third quarter and nearly 6% for the first nine months of 2019.
Key Growth Drivers
Agnico Eagle is making a good progress with its key growth projects and is also expanding mine life across a number of properties.
The company is ramping production at Meliadine, which is expected to produce around 230,000 ounces of gold in 2019 and includes pre-commercial production ounces. The project commenced commercial production in May 2019.
In October, Agnico Eagle announced that the Amaruq satellite deposit at the Meadowbank Complex achieved commercial production on Sep 30, 2019. Notably, the start of production at the Meliadine and Amaruq projects is expected to enable Agnico Eagle to generate net free cash flow in second-half 2019. It will also help the company lower net debt and increase dividend payout while steadily growing business. As such, these key growth drivers are likely to support the company’s earnings in 2019.
An Outperformer
Agnico Eagle has outperformed the industry it belongs to in the past year. The company’s shares have surged 66.5% compared with 51.5% rally of the industry.
Impressive Surprise History
The company has an impressive earnings surprise history. Agnico Eagle has surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 245.9%.
Estimates Moving North
Earnings estimate revisions have the greatest impact on stock prices. The Zacks Consensus Estimate for earnings for Agnico Eagle has moved north in the past two months. Over this period, earnings estimates for the fourth quarter have moved up 8.8% while the same for 2019 advanced 14.3%.
Strong Earnings Growth for 2019
The Zacks Consensus Estimate for earnings for 2019 is currently pegged at 96 cents per share, which indicates expected year-over-year growth of 168.6%.
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 Kirkland Lake Gold Ltd KL, Impala Platinum Holdings Ltd IMPUY and Polymetal International plc AUCOY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 95.3% in the past year.
Impala Platinum Holdings has projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 229.3% in a year.
Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have appreciated 52.7% in the past year.
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