Jefferies joins Barclays in backing major gold miner
Panic is a lousy appraiser. When fear sweeps through a sector, the selling rarely distinguishes between businesses that deserve the beating and businesses that simply got caught in the crowd. That gap between price and quality is where professional investors build careers, and it tends to open ...
Overview
Panic is a lousy appraiser. When fear sweeps through a sector, the selling rarely distinguishes between businesses that deserve the beating and businesses that simply got caught in the crowd.
That gap between price and quality is where professional investors build careers, and it tends to open widest in commodities, where the underlying asset can swing violently for reasons that have nothing to do with any single company's operations.
Gold has spent 2026 providing a masterclass in that kind of violence. The metal hit a record $5,595 an ounce in January, capping a two-year run of record after record.
Then the story flipped. An oil shock tied to the Iran conflict pushed interest rate expectations higher, the dollar found its footing, and gold slid below $4,400 by early June. Mining stocks, which amplify every move in the metal, fell harder still.
The slump left two of Wall Street's most closely watched research desks to pick through the wreckage.
On July 6, Jefferies upgraded Agnico Eagle Mines (AEM) to buy from hold. It raised its price target to $200 from $187, joining Barclays, which has carried an overweight rating on the gold producer since late May.
Gold's slide from record highs reset the mining trade
To understand why two major banks are leaning into a falling stock, you have to appreciate how quickly the gold trade unraveled.
As recently as the winter, Wall Street was racing to publish ever-higher forecasts, and every major analyst's gold outlook for 2026 pointed up. J.P. Morgan even modeled a scenario with gold trading between $8,000 and $8,500 an ounce, and Ed Yardeni still sees $6,000 by year's end.
Then the Iran conflict scrambled the script. Rather than rallying on geopolitical stress, gold fell as oil-driven inflation fears pushed rate expectations higher.
The metal changed hands near $4,121 an ounce on July 6, up 2% on the day after a weak June jobs report, according to 24/7 Wall St. That still leaves gold down roughly 26% from January's peak.
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Miners took the brunt of it. Agnico Eagle traded around $154 when the upgrade landed, according to Investing.com, a long way from the levels it commanded when bullion was setting records.
For anyone holding gold miners as an inflation hedge, this is the uncomfortable part of the cycle. The stocks that soared the most on the way up were often the highest-cost producers, because every extra dollar in the gold price fell straight to their bottom line.
That math runs in reverse just as fast, which is why money managers rotate toward low-cost operators when the metal wobbles.
Jefferies itself has grown more cautious on the metal, cutting its fourth-quarter gold estimate to $4,600 an ounce from $5,400 and its 2027 forecast to $5,000 from $5,200, according to GuruFocus.
That last detail is what makes this call interesting. The upgrade is not a bet on gold bouncing back.
Jefferies and Barclays converge on Agnico Eagle stock
Jefferies analyst Fahad Tariq argues the sell-off has done investors a favor by putting a premium operator on sale. The "recent share price weakness has improved the investment case," according to the analyst's note cited by TipRanks.
Details
Tariq's thesis is that if gold prices moderate, investors will crowd into quality, and Agnico Eagle offers the sector's strongest mix of asset quality, safe jurisdictions, operational consistency, and balance-sheet strength.
The firm models production climbing about 17% between 2026 and 2031, from 3.37 million ounces to 3.93 million, the Investing.com report notes.
Related: Agnico Eagle CEO makes a quiet promise to gold investors
Barclays got there first. The bank initiated coverage on May 22 with an overweight rating and a $213 price target, praising the company's "track record of driving share returns through acquisitions," reported Investing.com in a separate note, pointing to the Kirkland Lake, Yamana, and O3 deals.
What struck me reading both notes is that neither bank is asking gold to rescue the stock. Both are betting on cost discipline and geography. The numbers explain why.
- Agnico Eagle's all-in sustaining costs (AISC) of $1,456 an ounce are the lowest among senior producers, leaving margins of roughly $3,140 an ounce, GuruFocus data confirmed.
- More than 85% of production comes from Canada and Finland, two of the safest mining jurisdictions on the planet, according to Investing.com coverage of the Barclays initiation.
- The company earned $4.46 billion on $11.91 billion of revenue in 2025, with profit more than doubling, Stock Analysis reported.
- Across 22 analysts, the average price target sits at $241.57, well above both banks' numbers, Stock Analysis noted.
When I ran the math on the two targets, Barclays' figure implies roughly 37% upside from the July 6 open near $154, and Jefferies' $200 implies about 30%.
For a company the market values near $77 billion, those are unusual gaps. That consensus number will drift as more desks refresh their models, but the direction of the July 6 calls suggests the floor is being defended.
A wall collapse in Quebec tests the bullish case
The timing of this twin endorsement is what makes it gutsy. On July 1, a rock mass movement hit the north wall of the Barnat open pit at Agnico Eagle's Canadian Malartic complex in Quebec.
There were "no injuries, equipment damage or environmental impact," according to a company statement, but mining at the pit has been temporarily suspended.
The damage shows up in the outlook instead. The company expects the incident to shave 60,000 to 80,000 ounces off second-half production, pushing full-year output toward the lower end of its 3.3 million to 3.5 million ounce guidance, the statement shared. Second-quarter production of roughly 845,000 ounces came in slightly ahead of plan.
Not everyone shrugged it off. UBS cut its price target to $170 from $210 and kept a neutral rating, reported MarketScreener.
Barclays trimmed its own target to $210 from $213 on July 6, the same day Jefferies upgraded, but held its overweight rating, a signal the bank views the setback as a guidance problem rather than a thesis problem.
That is the bet investors are being asked to weigh. Two banks looked at a stock hit by a falling metal price and a mine wall failure in the same week and concluded the punishment outran the crime.
My read is that the market is paying for last week's headlines while the banks are paying for the next five years of production.
The next test arrives fast: Agnico Eagle reports second-quarter results after the close on July 29, when it will update production and cost guidance and, ideally, put a timeline on restarting Barnat.
If the low-cost machine keeps printing $3,000-an-ounce margins through the mess, the quality argument gets a lot harder to ignore. If gold keeps sliding and the guidance cuts deepen, the bulls will learn why the stock was cheap.
Related: Barclays issues urgent note for gold investors after selloff
Source
Originally published at www.thestreet.com.