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Since Agnico Eagle Mines Limited (NYSE:AEM) released its earnings in September 2018, analysts seem fairly confident, as a 34% increase in profits is expected in the upcoming year, though this is noticeably lower than the previous 5-year average earnings growth of 64%. Currently with trailing-twelve-month earnings of US$244m, we can expect this to reach US$327m by 2020. Below is a brief commentary on the longer term outlook the market has for Agnico Eagle Mines. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Agnico Eagle Mines
How will Agnico Eagle Mines perform in the near future?
The 10 analysts covering AEM view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of AEM’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 31% based on the most recent earnings level of US$244m to the final forecast of US$444m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $0.82 in the final year of forecast compared to the current $1.06 EPS today. With a current profit margin of 11%, this movement will result in a margin of 16% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Agnico Eagle Mines, I’ve put together three essential aspects you should look at:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is Agnico Eagle Mines worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Agnico Eagle Mines is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Agnico Eagle Mines? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.