Although it hasn’t received the airtime it deserves, gold prices have been rocketing higher this year. With more new record highs this week, gold has outperformed the S&P 500 by a significant margin year-to-date and since the start of 2023. Not surprisingly, gold miner stocks like Agnico Eagle Mines (AEG) have also performed well this year.

Agnico Eagle Mines has everything a gold investor could ask for, including a rock-solid balance sheet, strong stock price momentum, huge earnings growth forecasts and a reasonable valuation. Furthermore, the stock boasts a top Zacks Rank, significantly increasing the odds of a further near-term rally.

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Powerful Earnings Revision Trend in AEG

As the price of gold rallies, gold mining stocks enjoy immediate expansion in their margins, Agnico Eagle Mines included. Today, AEG has a Zacks Rank #1 (Strong Buy) rating, reflected by significant revisions higher to its earnings estimates.

Analysts have nearly unanimously upgraded earnings forecasts over the last two months, with FY25 earnings estimates jumping by a hefty 23.4% over the last 60 days. FY24 earnings estimates have also been revised higher by 9.9% and are projected to climb 79.8% YoY to $4.01 per share. Over the next three to five years EPS are expected to grow at an impressive 28.2% annually.

It is also worth noting that the Mining – Gold Industry currently sits in the Top 4% (9 out of 251) of the Zacks Industry Rank, and that the Zacks Earnings ESP is projecting the next earnings period to be analysts estimates by 5.82%.

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AEG Stock Technical Setup

Rounding the compelling investment opportunity in Agnico Eagle Mines stock is a technical trading setup. Over the last week or so, the price action has been forming a bull flag from which investors can easily measure a trade.

If the stock can trade above the $88.75 level, it would signal a technical breakout. Alternatively, if the stock loses the $86 level of support, it may be worth waiting for another opportunity.

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Should Investors Buy Agnico Eagle Mines Shares?

Agnico Eagle Mines is currently trading at a one year forward earnings multiple 0f 21.6x, which is below the broad market average and well below its 10-year median of 43x. Additionally, with earnings expected to grow 28.2% annually, AEM has an attractive PEG ratio of 0.77, indicating a discount based on the metric.

For investors seeking exposure to the gold market, Agnico Eagle Mines is a powerful way to express the trade. AEG has a reasonable valuation, top Zacks Rank and even pays a 1.8% dividend. 

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