Can Agnico Eagle Keep Its Shine Amid Rising Production Costs?

Agnico Eagle Mines Limited AEM delivered better-than-expected earnings in the third quarter, but it remains hamstrung by higher unit costs. Its all-in sustaining cost (AISC) — the most important cost metric of miners — was $1,373 per ounce in the third quarter, marking a roughly 6% increase from the prior quarter and a 7% year-over-year rise. AISC increased due to higher total cash costs and an uptick in general and administrative expenses. Total cash costs per ounce for gold were $994, up 8% from $921 a year ago and higher than $933 in the prior quarter. Higher production costs warrant caution, as they will likely weigh on AEM’s profitability. This calls for prudent cost management to maintain competitiveness and sustain margins. AEM forecasts total cash costs per ounce in the range of $915 to $965 and AISC per ounce between $1,250 and $1,300 for 2025, suggesting a year-over-year increase at the midpoint of the respective ranges. While Agnico Eagle is taking actions to control costs, the inflationary pressure is likely to continue over the near term, weighing on its overall financial performance. AISC is likely to rise in the latter part of 2025 as deferred expenditures are realized. Maintaining its cost discipline will be crucial for the company to sustain its margin expansion.Among AEM’s peers, Newmont Corporation NEM lowered its third-quarter AISC to $1,566 per ounce, marking a 3% decrease from the prior-year quarter and a decline from $1,593 in the prior quarter. This improvement was primarily due to a decline in costs applicable to sales and lower general and administrative expenses, as Newmont is enjoying the benefits from its cost-saving actions. Newmont expects gold AISC for the total portfolio to be $1,630 per ounce in 2025, reflecting a rise from $1,516 per ounce in 2024.Barrick Mining Corporation B also saw a 9% sequential decline in AISC in the third quarter, reaching $1,538 per ounce. This downside was driven by lower total cash costs per ounce and lower minesite sustaining capital expenditures. Barrick maintained its cost guidance for the full year. For 2025, Barrick projects AISC in the range of $1,460-$1,560 per ounce, indicating a year-over-year increase at the midpoint.The Zacks Rundown for AEMShares of Agnico Eagle have shot up 115.9% year to date against the Zacks Mining – Gold industry’s rise of 130.1%, largely driven by the gold price rally. Image Source: Zacks Investment ResearchFrom a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 19.51, a roughly 46.1% premium to the industry average of 13.35X. It carries a Value Score of C. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for AEM’s 2025 and 2026 earnings implies a year-over-year rise of 82.3% and 20.7%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days. Image Source: Zacks Investment ResearchAEM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Newmont Corporation (NEM): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report Barrick Mining Corporation (B): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks