On February 18th, JPMorgan updated its rating on Agnico Eagle Mines Ltd stock to Overweight from Neutral rating. JPMorgan increased the target price to $41 from $38 on the share of the company, mentioning the confidence it has on the gold miner asset base.
On Wednesday research note, analyst at JPMorgan , John Bridges said that he feels that "Agnico Eagle Mines has the correct assets and management who has got the experience for the present complex gold market". He further said that the company is all set to face the impact of strengthening US Dollar. Agnico has majority of its gold mines situated in Mexico, Canada and Finland which protect the company from volatility in the greenback.
Mr. Bridges said that equity shareholders made an error, in profitability of the company with the variations in the yellow metal prices in US dollar. He stated that the yellow metal prices are in Canadian dollars, Euro or Mexican pesos are going up, which is beneficial for companies like Agnico Eagle because of the presence of its mine in Canada, Mexico and Finland.
Furthermore, the analyst made a point that Agnico has "Mines situated in the friendliest locations." While highlighting on the extensive life and low cost related to these mines, Mr. Bridges said, "Both mines La Ronde and Kittila have long life with La Ronde just starting to witness its best quality gold ores".
The analyst also mentioned that Agnico Eagle is functioning underground mines, which can be used to aim the areas having gold ores. For the open pit mines operator, as fluctuation in the prices of the valuable metal can cause reduction in cash flows, which is different from the underground mines company is working.
Additionally, the Canadian based gold producer company provided its future guidance report till the year 2017, the company made an announcement of launching five new projects. The analysts are hopeful about the performance of the company for a decade.
Out of 28 analysts having coverage on the stock of Agnico Eagle as polled by Bloomberg, 17 have given the stock a Buy rating, eight has rated it a Hold and three has given Sell rating. The 12-month consensus price target on the share is $35.2.
Agnico Eagle Mines Ltd stock is up by 1.42%, with share price of $30.80 at market close on Monday February 23rd, with 30-days mean volume of 3.23 million shares.