Results: Agnico Eagle Mines Limited Beat Earnings Expectations And Analysts Now Have New Forecasts
Agnico Eagle Mines Limited (NYSE:AEM) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.5% to hit US$981m. Agnico Eagle Mines also reported a statutory profit of US$0.91, which was an impressive 39% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Agnico Eagle Mines
Following the latest results, Agnico Eagle Mines' seven analysts are now forecasting revenues of US$4.19b in 2021. This would be a huge 42% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 84% to US$4.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.17b and earnings per share (EPS) of US$4.68 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$91.36, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Agnico Eagle Mines analyst has a price target of US$123 per share, while the most pessimistic values it at US$49.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Agnico Eagle Mines' growth to accelerate, with the forecast 42% growth ranking favourably alongside historical growth of 5.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Agnico Eagle Mines to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Agnico Eagle Mines' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$91.36, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Agnico Eagle Mines going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Agnico Eagle Mines .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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