QS Research · Michael Burry's Scion Capital analyst template · 2006
AGNICO EAGLE MINES LTD (AEM)
As of 2026-11-11 · 11/15 boxes filled from SEC filings and market data
Report price $190.46 (close 2026-11-10)
Conclusion: SHORT
Conviction low · base case -30% · downside -32% · upside +4%
Agnico is a high-quality operator (20.4% ROIC vs 6.9% WACC, 36.9% FCF margin, net cash $3,416M at 2026-09-30) but the market already pays for it: 21.3x FY2025 net income of $4.46B and 11.0x EV/EBITDA on GAAP EBITDA (TTM), versus a peer-median 14.8x P/E (8 peers in the comps table), so the independent anchor values the same earnings at $132.34, -30.5%. The Q3 2026 print (2026-10-28) was a price-driven beat (realized gold $4,264/oz, +22.7%) masking a 6.1% volume decline to 814,012 oz, AISC of $1,648/oz and FY2026 guidance at the low end of 3.3-3.5 Moz with costs near the top of $1,400-$1,550; the 2026-10-30 call added a $50-80/oz 2027 cost headwind. The downside P/E is 18.11x, halfway from today's 21.3x to the 20x market anchor and at least 15% below today's, giving $129.51, -32.0%; the only upside multiple in the data (SSRM's 22.3x P/E) gives $198.84, +4.4%, so reward/risk is 0.14 and the call is short with low conviction: the growth pipeline (Odyssey Q2 2027, Hope Bay, >4 Moz target) is real but not yet in the numbers.
Key numbers
- Share price: $190.46
- Market cap: $95.24B
- Latest financial period: FY Dec 2025 to Dec 31, 2025
- Revenue (FY Dec 2025): $11.91B
- EV / EBITDA (FY Dec 2025): 11.0x
- P/E (FY Dec 2025): 21.3x
- FCF yield: 4.6%
- Price / book: 3.85x
- EV / FCF (FY Dec 2025): 21.0x
- Revenue growth (latest fiscal year): +43.7%
- ROIC (FY Dec 2025): 20.4%
- WACC: 6.9%
- Economic profit spread: +13.5 pts
The 15 boxes
- ✓ 1. Long-form business notes
Agnico Eagle is a senior gold producer that has roughly doubled in output and tripled-plus in revenue between FY2020 and FY2025, moving from a Canada/Finland/Mexico mid-tier miner to what its own FY2025 AIF calls Canada's largest mining company and the world's second largest gold producer, with 11 mines after the 2022 KLG merger and the 2023 Yamana transaction. FY2025 payable production was 3,447,367 oz at total cash costs of $979/oz and AISC of $1,339/oz, versus 1,736,568 oz at $775/oz and $1,051/oz in FY2020; 2026 guidance is 3.3–3.5 Moz at $1,020–$1,120 total cash costs and $1,400–$1,550 AISC. Revenue went from $3.14B (FY2020) to $11.91B (FY2025) and operating cash flow from $1.19B to $6.82B, funded by a capital program whose 2026 guidance is $2,595.0 million. The model is simple: mined ounces sold at spot with no hedging, with growth bought through share issuance and paid for in rising unit costs.
- ✓ 2. Competitive advantage
Agnico Eagle has scale and a large, multi-mine gold portfolio, but the 40-F claims no brand, network, switching-cost or proprietary cost advantage: it competes for mining properties, supplies and skilled labour, like every peer. The record looks strong in dollar terms - revenue $3.14B in FY2020 to $11.91B in FY2025, net income $511.6M to $4.46B, operating cash flow $6.82B in FY2025 against $2.42B capex - but it coincides with gold averaging $1,799/oz in 2021 and $3,432/oz in 2025 ($4,927/oz average for 2026 to March 12), so the margin history is largely a price story, not proof of a durable moat. The closest things to structural advantage are the USD-revenue/CAD-cost mismatch (86.9% of forecast 2026 production is Canadian) and portfolio breadth: 11 operations, with Detour Lake the largest at 20.09% of FY2025 gold production and 20.96% of FY2025 operating margin - no single-asset dependence, but no single dominant low-cost asset either.
- ✓ 3. 10-Q takeaways
Agnico Eagle reports Q3 2026 through a 6-K interim MD&A and results release (no 10-Q, as a foreign private issuer), dated October 28, 2026: gold production of 814,012 ounces fell 6.1% from Q3 2025's 866,936 ounces, but a realized gold price of $4,264/oz (up 22.7%) drove revenue to $3,583.6 million, net income of $1,352.9 million ($2.67/share), adjusted net income of $1,324.3 million and free cash flow of $852.2 million. Unit costs rose: production costs per ounce $1,193, total cash costs $1,133 and AISC $1,648 in Q3 2026 versus $963, $952 and $1,331 a year earlier, with FY2026 cost guidance at the upper end of the ranges on diesel, consumables and tariff pressure. The balance sheet is net cash $3,416 million (cash $3,613 million, debt $197 million at September 30, 2026) after $250 million of buybacks and a $0.45 dividend in the quarter, and FY2026 production guidance stays at the low end of 3.3–3.5 million ounces after the Barnat pit suspension.
- ○ 4. Corporate governance
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ○ 9. Insider trading interpretation
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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