What action should be taken regarding shares of Agnico Eagle, TD Bank, and Alimentation Couche-Tard? Here are some analyst recommendations that could influence prices in the near future. Note: the author might hold a different opinion than what is stated here.
Agnico Eagle Limited (AEM, $110.45): Downside Risks and Upside Potential
Scotiabank analysts held their annual meeting with executives from Agnico Eagle Limited this week.
Following this meeting, analyst Tanya Jakusconek highlighted that the company is well-positioned to provide its investors with a long-term growth strategy, notably due to the expected rise in output from its gold operations in Malartic, located in Abitibi-Témiscamingue, and Detour Lake in Ontario. These sites are projected to reach 1 million ounces in annual production soon.
In Canada, the uncertainty surrounding the Hope Bay (Nunavut) and Upper Beaver (Ontario) projects has concluded, with production estimates for these projects set to reach 400,000 ounces annually by 2029 and 210,000 ounces by 2030, respectively.
Additionally, Scotia mentioned that Agnico Eagle plans to utilize its free cash flow to eliminate $540 million in debt over the next year, maintain its dividend, and reinvest in its operations.
“Agnico Eagle ranks at the top of our preferences due to the quality of its infrastructure, current and future production, and its overall profile with low geopolitical risk,” states Tanya Jakusconek, noting that Agnico primarily operates in Canada, the United States (Nevada), and Western Australia.
The company “has a robust presence in the regions where it operates, which reflects its capability to leverage this strength in its relationships, particularly with suppliers, financial partners, and its workforce. It also upholds good financial discipline. This positions it to offer a calculated risk and a solid return to its shareholders.”
In a note published Wednesday, Scotia, which maintains its “outperform” recommendation for the stock, reminds that Agnico Eagle remains significantly affected by the Canadian dollar and, consequently, by exchange rate fluctuations with the US dollar. A 10% change between these currencies will roughly affect the price of gold by $50 per ounce.
Nonetheless, the mining company is holding its forecast for gold production this year at 3.35 million to 3.55 million ounces, with total production costs averaging between $1,200 and $1,250.
TD Bank (TD, $78.60): The company is not yet in the clear in the United States
TD Bank (TD, $78.60): The company is not yet in the clear in the United States
TD Bank’s $3.57 billion provision related to investigations of its anti-money laundering program in the United States does not necessarily indicate that it is in the clear concerning regulatory issues in that region.
In its results released Thursday, TD reported a loss of $181 million for the third quarter of 2024, which ended on July 31. This translates to a loss of 14 cents per share. The bank’s revenue was $14.18 billion, amounting to $2.05 per diluted share on an adjusted basis.
Despite the substantial provisions, analysts at National Bank Financial (NBF) noted in a report published Thursday afternoon that TD’s outlook in the US remains uncertain. They indicated that non-monetary sanctions related to the investigation could also be introduced.
“In addition to regulatory demands that structurally increase compliance costs, the bank could face asset caps in its operations,” writes Gabriel Dechaine.
Compliance-related expenses have significantly impacted the bank’s results, with costs rising by 10% since the beginning of the financial year, while prior forecasts had been much lower.
These challenges for TD in the US do not prevent National Bank Financial from upgrading its recommendation for the stock from “underperform” to “perform in line with the sector.” Gabriel Dechaine explains that “the regulatory provision concerning fines might pave the way for a potential succession of CEOs, including the possibility of an external candidate.”
Moreover, analysts expect TD’s revenue estimates for 2025 to align closer with that of FBN, which stands 6% lower compared to before the last quarter.
“Our earnings per share forecast for 2025 remains unchanged,” said Gabriel Dechaine. “However, we are raising our price-to-earnings ratio from 9.5 to 10 to reflect reduced uncertainty regarding the financial implications of TD’s regulatory challenges. Our one-year target price is increasing from $74 to $78.”
FBN still positions TD in the lower half of its banking rankings, “particularly in the long term,” as its long-term growth may lag behind its competitors.
Alimentation Couche-Tard (ATD, $80.87): Another “challenging” quarter
Alimentation Couche-Tard (ATD, $80.87): Another “challenging” quarter
Alimentation Couche-Tard has garnered significant attention this week due to its friendly takeover bid for the Japanese group Seven & i. While awaiting the outcome of this transaction, the Quebec-based company is set to release its results for the first quarter of its 2025 fiscal year on September 4.
BMO Capital Markets has noted that macroeconomic conditions in the United States have not changed over the past quarter, which is likely to result in a 0.5% decrease in comparable store sales (those open for more than a year) compared to the same period last year.
“If Alimentation Couche-Tard can deliver better results in this regard, it would be very positive,” said Tamy Chen, an analyst at BMO.
In Europe and Hong Kong, comparable store sales are expected to decline by 1%. This marks an improvement from BMO’s earlier expectation of a 2% decline.
Contrary to the analyst consensus forecasting adjusted earnings per share of 85 cents, the analyst predicts it will be 76 cents. In addition to the drop in comparable store sales, she would not be surprised by a decrease in fuel margins in the US, where expectations have fallen from 55 cents per gallon to 51 cents.
The reduced volatility in the hydrocarbon sector is cited as a reason for this decrease, as Couche-Tard’s margins tend to rise in high volatility periods, according to BMO.
Despite the macroeconomic challenges that negatively affect Couche-Tard’s business model, BMO emphasizes that these are temporary. Unsurprisingly, it maintains its “outperform” recommendation for the Quebec multinational’s stock as well as its one-year target price of $89.
What to do with Agnico Eagle, TD Bank and Alimentation Couche-Tard shares? Here are some recommendations from analysts that could move prices in the near future. Note: the author may have a completely different opinion than the one expressed.
Agnico Eagle Limited (AEM, $110.45): Downside Risks and Upside Growth
Scotiabank analysts held their annual meeting this week with executives of mining company Agnico Eagle Limited.
From this meeting, analyst Tanya Jakusconek noted that the company is in an excellent position to offer its investors a long-term growth plan, particularly due to the increase in production from its gold infrastructures in Malartic, in Abitibi-Témiscamingue, and Detour Lake, in Ontario. These should soon reach 1 million ounces per year.
Still in Canada, the period of uncertainty regarding the Hope Bay (Nunavut) and Upper Beaver (Ontario) projects is over, while their productions are respectively estimated on an annual basis at 400,000 ounces by 2029 and 210,000 ounces by 2030.
Also, Scotia noted that Agnico Eagle will use its free cash flow to pay off $540 million in debt over the next 12 months, maintain its dividend, and reinvest in its operations.
“Agnico Eagle remains at the top of our list for the quality of its infrastructure, its current and future production as well as its general profile where geopolitical risk is low,” writes Tanya Jakusconek, recalling that Agnico operates mainly in Canada, the United States (Nevada), and Western Australia.
The company “has a solid presence in the regions where it operates and this is reflected in its ability to use this as leverage in its relationships, particularly with its suppliers, financial partners, and human capital. It also maintains good financial discipline. This is how it considers offering a calculated risk and a good return to its shareholders.”
In its note published Wednesday, Scotia, which maintains its “outperform” recommendation on the stock, recalls that Agnico Eagle remains heavily exposed to the Canadian dollar, and therefore influenced by exchange rates with the US dollar. Each 10% variation between the two currencies will have an impact of approximately $50 per ounce of gold.
Nevertheless, the mining company maintains its forecast of 3.35 million to 3.55 million ounces of gold produced this year at an average total production cost between $1,200 and $1,250.
TD Bank (TD, $78.60): The company is not out of the woods in the United States
Just because TD Bank has set aside a $3.57 billion provision related to investigations into the company’s anti-money laundering program in the United States doesn’t necessarily mean it’s out of the woods south of the border.
In its results presented Thursday, TD reported a loss of $181 million for its third quarter of 2024, ended July 31. That’s 14 cents per share. Its revenue totaled $14.18 billion, which represents $2.05 per diluted share on an adjusted basis.
Despite the billions of dollars in provisions, analysts at National Bank Financial (NBF) wrote in a note published Thursday afternoon, TD’s outlook in the United States remains unclear. Because, they say, non-monetary sanctions related to the investigation could also be added.
“In addition to regulatory requirements that structurally increase compliance costs, the bank could also be faced with a cap on assets in its operations,” writes Gabriel Dechaine.
Expenses related to regulatory issues also had a significant impact on the Bank’s results. Its expenses have increased by 10% since the beginning of the financial year, while forecasts were well below this result.
These troubles for TD south of the border do not prevent National Bank Financial from raising its recommendation on the Toronto financial institution’s stock from “underperform” to “perform in line with the sector.” Because, justifies Gabriel Dechaine, “the regulatory provision relating to fines could open the way to a potential succession of CEOs, which would not exclude an external candidate.”
Also, analyst consensus for TD’s 2025 revenue estimate is expected to move closer to that of FBN, which is 6% below where it was before last quarter.
“Our earnings per share forecast for 2025 remains unchanged,” said Gabriel Dechaine. “However, we are increasing our price-to-earnings ratio from 9.5 to 10 to reflect reduced uncertainty regarding the financial impacts of TD’s regulatory issues. Our one-year target price is increasing from $74 to $78.
FBN still positions TD in the bottom half of its banking hierarchy, “especially over the long term,” as its long-term growth could lag behind that of its peers.
Alimentation Couche-Tard (ATD, $80.87): another more “difficult” quarter
Alimentation Couche-Tard has attracted a lot of attention this week due to its friendly takeover bid for Japanese group Seven & i. But while waiting for the outcome of this transaction, the Quebec company will present its results for the first quarter of its 2025 financial year on September 4.
For these, BMO Capital Markets points out that macroeconomic elements in the United States have not changed during the last quarter, which should translate into a 0.5% decrease in sales by comparable stores (open for more than a year) compared to the same period last year.
“If Alimentation Couche-Tard manages to deliver better results in this regard, that would be very positive,” said Tamy Chen, analyst at BMO.
In Europe and Hong Kong, comparable store sales are expected to decline 1%. This would be an improvement from BMO’s previous expectations of -2%.
Contrary to the analyst consensus, which is expecting adjusted earnings per share of 85 cents, the analyst is instead predicting it will be 76 cents. In addition to the decline in comparable store sales, she would not be surprised by a decrease in fuel margins south of the border. In this regard, expectations are falling from 55 US cents per gallon to 51 cents.
Less volatility in the hydrocarbon sector explains this decrease, since Couche-Tard’s margins tend to increase in periods of high volatility, explains BMO.
Despite the macroeconomic headwinds that are unfavorable to Couche-Tard’s business model, BMO emphasizes that these are temporary. Unsurprisingly, it is maintaining its recommendation for the Quebec multinational’s stock at “outperform” and its one-year target price of $89.
