Agnico Eagle Mines is the IBD Stock Of The Day amid furious earnings growth and surging gold prices. On Tuesday, the gold stock flashed a bullish signal as it broke out.
Toronto-based Agnico delivered triple-digit EPS growth for a second straight quarter last month. Management reported record annual gold production, free cash flow and operating margins. As a result, Agnico stock took the crown as the world's most valuable silver and gold mining company.
Agnico is advancing several growth initiatives in Canada, TD Securities analyst Steven Green told investors after the report, according to TheFly.com. Green called Agnico a top pick among gold stocks.
Agnico Stock Scores Bullish Breakout
Shares of the IBD Leaderboard stock popped 3.7% in Tuesday's stock market action, pegging a new high.
The gold stock topped a 101.45 buy point from a short consolidation, according to MarketSurge charts. Investors could also use the round number of 100 as a place to enter, which would be above the bulk of the recent trading.
Trade has been tight the past three weeks, despite the volatile market, with shares finding support at their 21-day exponential moving average and well above longer-term technical levels.
The relative strength line made a new high as well, a favorable sign as a stock breaks out. A rising RS line, the blue line in the chart provided here, means that a stock is outperforming the S&P 500 index.
A 96 RS Rating means this top gold stock has outpaced 96% of all stocks in IBD's database over the past year. That score is up from 95 one week ago and 94 four weeks ago, MarketSurge shows.
Agnico stock successfully broke out past 89 at the end of October, before entering a new consolidation.
Gold Stocks Offer Safe Haven In Volatile Markets
Shares of Agnico Eagle Mines show a 21-day ATR of 3%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more gradual moves have lower ATRs.
In a volatile market, IBD suggests stocks with ATRs of 3 or below.
Silver and gold mining currently ranks a strong No. 8 out of 197 industry groups tracked by IBD.
Silver and gold prices rallied on Tuesday. Investors sought safe havens amid rising recession worries. The U.S. dollar index also weakened to its lowest level since early November. Spot gold rose 0.9% to $2,915 per ounce.
Bloomberg reported March 7 that Newmont has widened the output gap vs. rivals. UBS analysts upgraded Barrick Gold to buy from neutral last week, saying 2025 will mark a production low.
Agnico Eagle Mines Earnings
The IBD Stock Checkup tool shows that AEM stock holds a near-perfect Composite Rating of 98 out of 99. IBD's Composite Rating rolls various fundamental and technical metrics into one easy-to-use score.
Agnico Eagle Mines carries an EPS Rating of 97 out of a best-possible 99. Earnings growth averaged 116% over the past three quarters, far above the three-year average of 13%.
Sales growth averaged 26% over the last three quarters, in line with the three-year average.
The gold company beat fourth-quarter earnings estimates in February. It cited solid gold production, cost controls and a favorable gold price environment. Agnico also further slashed debt.
Gold Production Outlook
However, Agnico offered a somewhat tepid outlook. Its updated guidance projected "stable production" over the next three years, coming in slightly lower than prior guidance.
Analysts have lowered 2025 earnings estimates since then to $4.88 per share, FactSet shows. However, that would mark a further 15% increase in the year ahead after a 90% earnings recovery in 2024.
Year to date, this top gold stock has rocketed nearly 29%, vs. an almost 5% decline for the S&P 500. Over the past year, Agnico stock has soared 80.6%.
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