Valued at a market cap of over $100 billion, Agnico Eagle (TSX:AEM) is a gold mining company engaged in the exploration, development, and production of precious metals. The miner explores for gold, silver, zinc, and copper.
Its mines are located in Canada, Australia, Finland, and Mexico, with exploration and development activities in Canada, Australia, Europe, Latin America, and the United States.
Rising gold prices have enabled the TSX mining stock to gain nearly 300% over the last three years. Let’s see if Agnico Eagle stock is still a good buy in September 2025.
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Is the TSX stock undervalued in 2025?
Agnico Eagle delivered solid second-quarter results, producing 866,000 ounces at industry-leading all-in sustaining costs of US$1,289 per ounce while generating record free cash flow of US$1.3 billion.
In terms of market cap, Agnico is the second-largest gold producer globally. Its regional consolidation strategy continues to prove successful, particularly in its Abitibi platform, which spans Northern Ontario and Quebec, and produced over one million ounces in the first half at cash costs of just US$850 per ounce.
This 73% operating margin reflects the competitive advantages Agnico has built through decades of regional expertise, established supplier networks, and employee retention rates half the industry average.
Management’s five key value drivers indicate substantial growth potential, with projects capable of adding 1.3 to 1.5 million ounces of gold annually. The Canadian Malartic complex leads this pipeline, targeting one million ounces per year by 2030 through underground expansion and the development of satellite deposits.
The underground Odyssey project has grown from zero to over 20 million ounces since 2018, while infill drilling continues expanding the resource base.
Agnico’s balance sheet strength provides strategic flexibility, as it ended Q2 with nearly US$1 billion in net cash after repaying US$550 million in debt.
The company has returned US$300 million to shareholders through dividends and buybacks, maintaining its 42-year consecutive streak of dividend payments while doubling its share repurchase activity.
What is the AEM stock price target?
Agnico Eagle’s US$525 million exploration program, featuring 121 active drill rigs, continues to deliver impressive results. With gold prices near record highs and peer-leading cost performance, Agnico Eagle appears well-positioned to capitalize on favourable market conditions while building long-term value through disciplined capital allocation and operational excellence.
Analysts tracking Agnico Eagle stock forecast adjusted earnings per share to increase from US$4.23 per share in 2024 to US$7.28 per share in 2025. However, it is forecast to narrow to US$6.34 per share if gold prices move lower.
Today, AEM stock trades at 20 times forward earnings, which is marginally below its five-year average of 21.4 times. So, if the TSX stock is priced at 21.4 times earnings, it should trade 10% below current levels in early 2028.
In the event AEM stock declines, it will provide investors with an opportunity to gain exposure to a quality company at a lower valuation multiple. AEM also pays shareholders an annual dividend at $1.46 per share, indicating a yield of 1%. Wall Street expects the annual dividend to increase to $1.60 per share in 2028.
