Agnico Eagle: Overvalued Gold Stock, Set to Tumble

Agnico Eagle: Overvalued Gold Stock, Set to Tumble

Agnico Eagle Mines (AEM) is a Canadian precious metals explorer, producer, and marketer with operations across Northern America and Europe. I am bearish on the stock.

A principal component analysis suggests that the stars aren't exactly aligned for Agnico stock. Mining stocks often correlate with expected GDP growth, company earnings growth, and inflation.

Agnico is heading into 2022 with a downward revision of GDP growth of nearly 10%. The market would have priced the stock in on previous estimates, and recent downward revisions could mean that we're looking at an overvalued stock here.