Can Agnico Eagle Keep Earnings Shining Amid Cost Pressures?

Agnico Eagle Mines Limited AEM delivered better-than-expected earnings in the second quarter on higher realized gold prices, but it remains mired in headwinds from higher costs. Its all-in sustaining costs (AISC) — the most important cost metric of miners — were $1,459 per ounce in the second quarter, marking a roughly 14% year-over-year rise, impacted by higher total cash costs and an uptick in sustaining capital expenditures. 

Total cash costs per ounce for gold were $1,054, 14% higher than $925 a year ago. Total cash costs rose due to increased royalty costs, higher labor and energy costs and lower production. 

While Agnico Eagle is taking action to control costs, inflationary pressures are likely to continue, weighing on its overall financial performance. Maintaining cost discipline to sustain margin expansion will be crucial for the company.

AEM forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges. Cash costs are expected to increase in 2026, partly due to higher royalty costs, cost inflation (including higher labor and electricity costs) and lower grades across certain mines. Higher production costs warrant caution, as they will likely weigh on AEM’s profitability. 

Among AEM’s peers, Newmont Corporation NEM saw a roughly 22% year-over-year increase in AISC on a co-product basis in the second quarter, reaching $1,938 per ounce. NEM’s costs applicable to sales (CAS) rose 20% year over year. Newmont projects gold by-product CAS of $1,055 per ounce and gold by-product AISC of $1,680 per ounce. 

Kinross Gold Corporation KGC also saw higher production costs in the June quarter. KGC’s second-quarter attributable AISC was $1,821 per ounce, marking a 22% increase from the year-ago quarter. Kinross expects AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase from $1,571 per ounce in 2025.  

The Zacks Rundown for AEM

Shares of Agnico Eagle have gained 33.3% in a year compared with the Zacks Mining – Gold industry’s rise of 49.3%.

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From a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 15.61, a roughly 29.7% premium to the industry average of 12.04X. It carries a Value Score of D.

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The Zacks Consensus Estimate for AEM’s 2026 and 2027 earnings implies a year-over-year rise of 41.2% and a decline of 1.8%, respectively. The EPS estimates for 2026 and 2027 have been trending lower over the past 60 days.
 

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AEM stock currently carries a Zacks Rank #5 (Strong Sell). 

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This article originally published on Zacks Investment Research (zacks.com).

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