Agnico Eagle Mines Ltd. (AEM, Financial)(TSE:AEM, Financial) will release its third-quarter results after normal trading hours on Oct. 26.
For the third quarter, analysts estimate an average earnings per share of 18 cents, flat from the same quarter a year ago. Analysts estimate an EPS range between 31 cents (high) and 11 cents (low).
Source: Yahoo Finance
Concerning revenue, for the third quarter, analysts estimate a 9.20% increase on a year-over-year basis. The average estimate is $555.47 million and ranges between a high of $585.69 million and a low of $532.97 million.
Source: Yahoo Finance
A high quality, long-life assets base that Agnico Eagle Mines has successfully built up through acquisitions and exploration activities over time is the real strength that allows the miner to produce robust results in terms of increased revenues and earnings, as it was in the second quarter when the miner reported a 5.4% increase year over year in revenue ($537.6 million) and a 246.5% increase year over year in the quarterly adjusted net income ($35.0 million or 16 cents per share).
Better performance than the second quarter can be reasonably expected from the third-quarter report because of an 18.7% increase year over year in the price of the precious metal. During the second quarter the average quarterly gold price was $1,258.482 per troy ounce on the London bullion market and increased with 5.6% on a year-over-year basis.
The current assets give Agnico Eagle Mines the potential to produce from 30% to 40% more gold by 2020 that can assure a continued strong operational performance over time.
The choice to give the opportunity to its shareholders to benefit from a 25% dividend increase in the third quarter is a sign that the miner may deliver another strong quarter.
However, the increase in the quarterly dividend is sustained by a strong balance sheet with $473.7 million in cash and short-term investments on June 30 and financial flexibility given also by a long-term debt manageable repayment schedule. Sixty percent of total long-term debt ($1,210.30 million) matures after 2020.
Increases in CFO on a quarter-over-quarter and year-over-year basis are also expected.
The gold stock gained 87% year to date, but it looks overvalued by the stock market considering both Enterprise Value/EBITDA (14.54) and the Price/Book (mrq) (2.51).
Nine analysts out of 19 recommend holding this gold stock. The recommendation rating is 2.6. The rating ranges between 1.0 (Strong Buy) and 5.0 (Sell).
The average analyst price target is $56.59 (-2.43% from the target price of Oct. 14) versus a current share price of $49.27.
Disclosure: I have no positions in Agnico Eagle Mines.
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