Credit Suisse Analyst Downgrades Agnico-Eagle Mines on Valuation

Credit Suisse analyst Anita Soni downgraded Agnico-Eagle Mines Ltd. (AEM) to “neutral” from “outperform” on Friday, but not because the company did anything wrong. The downgrade was based on valuation – Agnico shares have risen as high as 43% since November and are currently up 37%, she told clients in a note.

Ms. Soni’s target price of $70 represents a return of only 7% above Thursday’s close.

She said:

Agnico-Eagle is still a solid story and offers unrivalled production growth with five development projects in the pipeline and an expansion to the company’s sole operating asset in the works over the next few years.

The miner’s fourth quarter earnings of $0.25 per share also beat her forecast of $0.21, while the consensus was $0.24.

Comments

[adamn111:]

sell the winners, keep the losers: clever

2008 Feb 24 12:33 PM

[misterchan:]

I think AEM may split. That would take away some beta, but ultimately it would solidify the upward direction. I have been writing puts for a few years, but I would consider writing calls only during a correction in gold. I can also remember AEM when it was $12.00 and I thought it was a terrible stock. Too bad I wasn't smart enough to buy it then and just wait. However, I currently view another issue as having the same upward potential. That is IAG. I have , at different prices, collected 1000 shares and plan to keep them until I feel that I was wrong. Recently, Iamgold went down because of one disappointment, and while reading the article, I learned that they have a large number of mining properties in many countries. Also they pay an annual dividend of $6.00 and have been doing that for 7 years. I write covered calls in case I am wrong. The stock is about $7.50. By the way. when AEM was $12.00, I couldn't create a profit, no matter what I did. So I decided it was a terrible investment and forgot about it. Until it started moving up. So now my opinion is - AEM is a wonderful company and IAG , one of these days, is going to be wonderful, too.

2008 Feb 24 07:50 PM