A month has gone by since the last earnings report for Agnico Eagle Mines (AEM). Shares have lost about 16.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Agnico due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Agnico Eagle’s Q4 Earnings Meet Estimates, Sales Lag
Agnico Eagle reported net income of $205.2 million or 85 cents per share in fourth-quarter 2020, down from net income of $331.7 million or $1.39 per share reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 67 cents, in-line with the Zacks Consensus Estimate.
The company generated revenues of $928.4 million, up 23.3% year over year. However, the figure lagged the Zacks Consensus Estimate of $944.1.
Operational Highlights
Payable gold production was up 1.4% year over year to 501,445 ounces in the reported quarter. The figure includes pre-commercial production from the IVR open pit at the Meadowbank Complex and the Tiriganiaq open pit at Meliadine. Total cash costs per ounce for gold were $701, down 6% year over year.
AISC were $985 per ounce, down 5.2% year over year.
FY20 Results
Earnings (as reported) for full-year 2020 were $2.12 per share compared with earnings of $2.00 per share a year ago. Net sales rallied 25.8% year over year to $3,138.1 million.
Financial Position
Agnico Eagle ended 2020 with cash and cash equivalents of $402.5 million compared with $321.9 million as of Dec 31, 2019. Long-term debt was around $1,565.2 million as of Dec 31,2020, compared with $1,364.1 million as of Dec 31, 2019.
Total cash from operating activities amounted to $403.5 million in the fourth quarter, up 56.7% year over year.
Outlook
The company expects gold production for 2021 to be 2,047,500 ounces. It also expects total cash costs per ounce of $700-$750 and AISC of $950-$1,000 per ounce in 2021.
Capital expenditures are predicted to be roughly $803 million in 2021 and in the range of $750-$800 million through 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -11.11% due to these changes.
VGM Scores
At this time, Agnico has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It’s no surprise Agnico has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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