The firm cited "solid corporate actions, mine maturity, and production growth" that "should allow for return and cash generation upside" as the reasons for the upgrade. Sterne Agee also lowered its EPS estimates for 2014 to $1 from $1.65 and for 2015 to $1.40 from $1.75.
"During the past 15 years, we have found Agnico to have been one of the best managed senior North American gold producers, providing valuation and resource growth while being careful not to dilute shareholders significantly," the report reads. "Agnico continues to offer one of the highest growth profiles in the industry, especially in an environment where most large and mid-cap miners expect flat to negative growth over the next few years. Agnico's operations are located in politically stable regions of Canada, Mexico, and Finland. We support Agnico's capital and cost-savings targets with potential for additional reductions while exhibiting ample liquidity."
TheStreet Ratings team rates AGNICO EAGLE MINES LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AGNICO EAGLE MINES LTD (AEM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AEM's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, AGNICO EAGLE MINES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- 48.15% is the gross profit margin for AGNICO EAGLE MINES LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.64% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from $106.33 million to $47.31 million.
- Net operating cash flow has significantly decreased to $80.98 million or 59.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: AEM Ratings Report