DCF Studio

    AEM.TO · TOR · Basic Materials

    Agnico Eagle Mines Limited

    Also onConsensus Drift

    Implied value per share

    CAD 355.48

    Market price

    CAD 278.97

    Implied upside

    +27.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    AdjustedCapital expenditure runs at 27.7% of revenue against depreciation of 18.4%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 355.48+27.4%
    Exit multiple
    CAD 812.79+191.4%
    Market price
    CAD 278.97

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn7bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 15.2bnUSD 19.4bnUSD 24.7bnUSD 31.5bnUSD 40.2bn+27.5%
    EBITUSD 5.4bnUSD 6.9bnUSD 8.8bnUSD 11.2bnUSD 14.2bn+27.5%
    NOPATUSD 4.0bnUSD 5.0bnUSD 6.4bnUSD 8.2bnUSD 10.5bn+27.5%
    Add depreciation & amortisationUSD 2.8bnUSD 3.6bnUSD 4.5bnUSD 5.8bnUSD 7.4bn+27.5%
    Less capital expenditureUSD -4.2bnUSD -5.4bnUSD -6.8bnUSD -8.7bnUSD -11.1bn+27.5%
    Less increase in working capitalUSD 158.1mUSD 201.7mUSD 257.2mUSD 328.0mUSD 418.3m-27.5%
    Free cashflow to firmUSD 2.7bnUSD 3.5bnUSD 4.4bnUSD 5.6bnUSD 7.2bn+27.5%
    Discount factor0.96420.89640.83330.77470.7202-
    Present valueUSD 2.6bnUSD 3.1bnUSD 3.7bnUSD 4.4bnUSD 5.2bn+18.6%
    Present Value Of The ForecastUSD 18.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.778Reported 0.668, pulled toward 1.0 (Blume)
    Cost of equity7.58%Risk-free + beta x equity risk premium
    Cost of debt4.17%Interest expense / average total debt
    Market capitalisationUSD 141.3bn99.8% of capital
    Total debtUSD 321.5m0.2% of capital, book value as a proxy
    Tax rate26.5%Effective, capped at statutory
    WACC7.57%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 254.24

    85% of EV

    Forecast FCFF, final year
    USD 7.2bn
    Capex at depreciation, working capital in reinvestment
    USD 10.5bn
    Less reinvestment at g/ROIC (30.2% of NOPAT)
    USD -3.2bn
    Capitalised
    USD 7.3bn
    ROIC (reported)
    8.3%
    Terminal value, undiscounted
    USD 147.9bn
    Terminal value, discounted
    USD 106.5bn
    Enterprise value
    USD 125.4bn
    Less net debt
    USD -2.6bn
    Equity value
    USD 128.0bn

    Exit at 17.4x EBITDA

    Value per shareUSD 581.31

    93% of EV

    Terminal value, undiscounted
    USD 376.5bn
    Terminal value, discounted
    USD 271.2bn
    Enterprise value
    USD 290.1bn
    Less net debt
    USD -2.6bn
    Equity value
    USD 292.7bn

    Spread between methods: 78%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.57%377.90398.34425.12461.96516.15
    6.57%299.98308.37318.61331.44348.16
    7.57%247.90250.87254.25258.16262.82
    8.57%211.94212.78213.62214.46215.30
    9.57%187.05187.77188.49189.21189.93

    Outlined: this model. Green text: above today's price of 199.52. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year27.5%21.1%-6.5pp
    EBIT margin35.5%28.2%-7.3pp
    Discount rate7.6%9.1%+1.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.