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Top 3 Overvalued Canadian Stocks

The three priciest stocks within Morningstar’s Canadian equity coverage.

Vikram Barhat 5 March, 2025 | 6:19PM
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Gold mining and financial services stocks have been big winners over the past year. Riding the secular trend, Kinross Gold K, Agnico Eagle Mines AEM, and Fairfax Financial Holdings FFH stand out as the most expensive Canadian-listed stocks, according to Morningstar analysts.

For this article, we screened Canadian-listed stocks under Morningstar’s coverage, ranked them based on their price/fair value ratios, and picked the three most overvalued names as of Feb. 28.

Here’s a closer look at these three stocks.

Kinross Gold


The most expensive name on the list is mining company Kinross. Over the last 12 months, the stock is up roughly 133%, with a nearly 17% gain for the year to date.

The firm enjoyed a major tailwind of higher gold prices, which helped it double its net profit to USD 240 million (about USD 0.20 per share) from the year-ago period. This helped offset the drag created by “lower gold equivalent ounce volumes and increased unit cash costs,” says Morningstar equity researcher Jon Mills.

However, the stock is trading at more than 70% above its fair value estimate, making it the most overvalued name in Morningstar’s Canada coverage. “This likely reflects gold trading close to historical highs, along with Kinross’ strong operating performance,” says Mills.

Mills recently raised the stock’s fair value estimate to C$9.10 per share from C$8.50, prompted by “higher expected midcycle volumes and lower unit cash costs over our forecast period, partially offset by higher capital expenditure.”

Management plans to return potential additional cash to shareholders via share repurchases in 2025. However, Mills prefers “the dividend to be increased, given the substantial premium at which the shares trade.”

Kinross Gold Stock vs. Morningstar Fair Value Estimate

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Agnico Eagle Mines


The second most expensive stock on the list is another gold producer, Agnico Eagle Mines, which is up over 107% over the last 12 months and more than 21% for the year to date. But now its valuations are stretched.

The miner racked up 2024 fourth-quarter adjusted EBITDA of USD 1.3 billion, a 58% year over year jump, driven by 34% higher prices. This more than offset a 6% decline in sales volumes and unit cash costs increasing 7%.

However, the picture isn’t quite rosy for 2025. “While the result was better than we expected, near-term production guidance is modestly lower,” cautions Mills. “We now expect sales volumes of around 3.4 million ounces in 2025, down from our previous estimate of 3.5 million but similar to 2024.”

The stock is trading about 65% above its fair value estimate. Mills attributes this outperformance to “elevated gold prices and strong operating performance—highlighted by meeting production guidance and strong cost control.”

In 2024, Agnico repurchased 1.7 million shares at value-diluting prices of about USD 69 per share. “Given the substantial premium at which shares [now] trade to our fair value, we prefer that it raise the unchanged USD 0.40 quarterly dividend rather than repurchase additional shares,” Mills says.

Agnico Eagle Mines Stock vs. Morningstar Fair Value Estimate

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Fairfax Financial Holdings


The third most expensive name is Toronto-based financial services firm Fairfax Financial. Over the last 12 months, the stock is up 43%, with a gain for the year to date of just over 2%.

Analyst Brett Horn explains: “While its primary business is insurance, Fairfax is in some ways more of an investment fund. Chairman and CEO Prem Watsa has a long history of bold investment bets and has shown a willingness to be unorthodox when it comes to portfolio construction. As a result, compared with other insurers, the company’s results tend to be driven more by results on the investment side. We’re somewhat skeptical of this approach, as we believe disciplined underwriting is a more reliable path to long-term value creation for insurers. Fairfax’s underwriting record is relatively poor, although it has improved recently.”

Horn continues: “Following the 2016 US election of Donald Trump as president, Watsa did an about-face and banked on strong equity markets. Watsa’s optimism has largely worked to the company’s advantage, but it has come with some volatility. In the near term, however, strong industry pricing and higher interest rates should be a material tailwind for Fairfax and its peers and lead to unusually strong profitability.”

Fairfax Financial Holdings Stock vs. Morningstar Fair Value Estimate

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The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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Vikram Barhat

Vikram Barhat  is a markets reporter for Morningstar.

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