AEM Stock Pops 25% in a Month: What Should Investors Do Now?

AEM’s One-month Price Performance

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AEM stock broke above the 50-day simple moving average (SMA) on Aug. 5, 2026. The stock has been trading below the 200-day SMA since May 15, 2026. Following a death crossover on June 18, 2026, the 50-day SMA is lower than the 200-day SMA, indicating a bearish trend.

Agnico Eagle’s Shares Trade Above 50-Day SMA

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Let’s take a look at AEM’s fundamentals to better analyze how to play the stock.

Key Projects to Drive AEM’s Production Upside

Agnico Eagle is focused on executing projects that are expected to provide additional growth in production and cash flows. It is advancing its key value drivers and pipeline projects, including the Odyssey project in the Canadian Malartic Complex, Detour Lake, Hope Bay, Upper Beaver and San Nicolas. 

The Hope Bay Project, with proven and probable mineral reserves of 3.4 million ounces, is expected to play a significant role in generating cash flow in the years to come. AEM made a positive investment decision for the project in May 2026, backed by a study with a projected annual gold production of 400,000 to 435,000 ounces over an initial 11-year mine life. The company carried out construction activities in the second quarter to support project redevelopment.

At Canadian Malartic, Agnico Eagle is advancing the transition to underground mining with the construction of the Odyssey mine and executing other opportunities to beef up annual production. Production from the East Gouldie deposit ramped up during the second quarter.  

Drilling at the Marban deposit, added through the acquisition of O3 Mining, focuses on mineral reserve and mineral resource expansion. At San Nicolas, the land use change and the environmental impact assessment permits were received in July 2026, marking a milestone for the development of the project. At Detour Lake, AEM advanced the development of the exploration ramp during the second quarter. Development activities also advanced at Upper Beaver, which has the potential to produce 200,000-225,000 ounces of gold and 3,600 tons of copper annually.

AEM’s Solid Financial Health Supports Capital Allocation

AEM has a robust liquidity position and generates substantial cash flows, which enable it to maintain a strong exploration budget, finance a strong pipeline of growth projects, pay down debt and drive shareholder value. Its operating cash flow for full-year 2025 was a record $6.8 billion, driven by operational efficiencies. Operating cash flow was roughly $2.1 billion in the second quarter, up around 16% from the year-ago quarter.  

AEM generated record second-quarter free cash flow of roughly $1.3 billion, driven by higher realized gold prices, cost control and strong operational results. Higher realized prices are expected to continue to boost AEM’s profitability and drive cash flow generation. 

Gold prices are regaining strength after a significant downward correction. Heightened geopolitical tensions, a weaker U.S. dollar and tariff-related worries drove bullion to a record high of nearly $5,600 per ounce in late January. Since then, gold has pulled back sharply due to inflation concerns triggered by a surge in crude oil prices amid Middle East tensions. While gold started April near $4,800 per ounce, prices tumbled to $4,500 per ounce around the end of May. 

Bullion continued to retreat in June, with prices slipping below $4,000 per ounce to a near eight-month low amid rate-hike expectations and a stronger greenback, despite reduced inflation concerns following the interim agreement between the United States and Iran. Prices remain, for the most part, under pressure in July, occasionally breaking above the $4,100 per ounce level.

Gold prices have been on an upward trajectory lately, surging above $4,300 per ounce, as a slump in oil prices, driven by efforts to reopen the Strait of Hormuz, eased inflation concerns, reducing expectations for a U.S. interest rate hike. 

Meanwhile, the company remains focused on paying down debt using excess cash, with total long-term debt reducing by roughly $950 million in 2025. AEM had a total long-term debt of $197 million at the end of the second quarter. It ended the quarter with a significant net cash position of roughly $3.3 billion, driven by an increase in cash.   

AEM also returned $1 billion in the first half of 2026 through dividends and share buybacks, including a record $625 million in the second quarter. It repurchased shares worth $550 million in the first half. It raised the quarterly dividend by 12.5% to 45 cents per share.  The company plans to return 40% of its annual free cash flow to its shareholders. AEM offers a dividend yield of 1% at the current stock price. It has a five-year annualized dividend growth rate of 2.7% and a payout ratio of 16%.   

Higher Costs & Production Headwinds Weigh on AEM Stock

Agnico Eagle remains exposed to higher production costs. Its all-in-sustaining costs (AISC) — a critical cost metric for 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. 

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. Higher production costs warrant caution, as they will likely weigh on profitability.

Agnico Eagle also saw lower production in the first half of 2026 due to lower grades and throughput across certain mines. Production also fell in the second quarter, impacted by reduced production from Canadian Malartic. Barnat pit wall movement is a key near-term operational risk. A rock mass movement at the Barnat open pit at Canadian Malartic involved roughly one million tons of material. Mining was suspended at the pit, with remediation expected in the third quarter and mining resumption anticipated in the fourth quarter. 

The event is projected to reduce gold production at Canadian Malartic by 60,000-80,000 ounces in the second half of 2026. For full-year 2026, the company expects gold production near the lower end of its guidance of 3.3 million to 3.5 million ounces, reflecting the preliminary redesign of the Barnat open pit. The reduced production base is likely to keep per-ounce costs elevated, potentially limiting margin expansion.

AEM’s Earnings Estimates Southbound

The Zacks Consensus Estimate for AEM’s 2026 earnings has been going down over the past 60 days. The consensus estimate for third-quarter 2026 earnings has also been revised lower over the same time frame.

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Agnico Eagle Stock Trades at a Premium

Agnico Eagle is currently trading at a forward 12-month earnings multiple of 15.47, a roughly 28.5% premium to the peer group average of 12.04X. AEM is also trading at a premium to Barrick Mining, Newmont and Kinross Gold. Agnico Eagle has a Value Score of D. Barrick Mining, Newmont and Kinross Gold have a Value Score of B, each.  

AEM’s P/E F12M Vs. Industry, B, NEM & KGC

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How Should Investors Play AEM Stock?

AEM is backed by a solid lineup of growth initiatives and a healthy balance sheet. Higher realized gold prices should support stronger margins and improved cash flow. However, elevated cost levels and lower expected production may weigh on the company’s performance. Its stretched valuation also might not offer an attractive entry point at this time. This, coupled with declining earnings estimates, casts a pall on the company's prospects. Therefore, it is prudent to avoid this Zacks Rank #5 (Strong Sell) stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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