Agnico Eagle Mines (AEM.TO) was downgraded to Neutral from Buy while its price target increased to US$110 from US$100, UBS said in a note released over the weekend.

UBS said it acknowledged that Agnico's relative outperformance has been driven by peers de-rating rather than the company materially re-rating.

But after consistent outperformance, the miner's relative valuation also looks stretched, UBS said.

The price target change reflects modest increases in gold price forecasts, which resulted in 2025/26 earnings per share upgrades of 9%/5%.

"We continue to believe AEM will deliver against its guidance, generate robust [free cash flow] and increase cash returns to shareholders," UBS said. "But with limited near-term volume growth, AEM would need to re-rate further to justify material upside at $3,000/oz."

"This is possible but with peers trading at material valuation discounts and with more potential to positively surprise vs low expectations, we think other names are better positioned to outperform," UBS said.

UBS noted that its preferred global gold stocks are Barrick Gold (ABX.TO), Endeavour Mining (EDV.TO) and Franco-Nevada (FNV.TO).

Agnico was trading up $0.75 or near 0.5% at near US$154.50.