Credit Suisse has kept a Neutral rating on Agnico-Eagle Mines Limited (AEM.TO) but revised its estimates and lowered its target price to $77 from $82 due to a “disappointing start to 2011.” AEM is now down 3% at around $62.30, above a day low of $62.04 touched around 15 minutes ago, but well off the day high $63.94 touched in the early minutes of trading. It opened at $63.69 compared to a previous close of $64.45.

“We are revising our target price to $77.00 from $82.00 based on a revision to our DCF of $54.79/sh (revised from $57.68) with net cash of $0.41 (revised from $0.98) added at par. We continue to use a 1.4X P/DCF multiple, and are maintaining our Neutral rating.”

On March 28th, AEM revised production guidance for 2011FY downward. “AEM reduced guidance for 2011FY by 4-7% overall and by 14-22% at Meadowbank as a result of a kitchen fire at Meadowbank on March 10th. AEM has been required to reduce staff levels and use low grade stockpiles in the interim. The company expects to have a solution in place by the end of April and to ramp up to prior rates by the end of Q2. Meadowbank reductions: negative reducing guidance at Meadowbank by 50kozs from 360kozs to 310kozs for 2011FY, and cash costs from $600/oz to $700/oz for 2011FY. We are at December guidance. On a company wide basis, that translates to a reduction in production from 1.13-1.23Mozs to 1.08 -1.15Mozs or a 50-80kozs reduction a bit worse than the impact to Meadowbank alone. Overall cash costs are increasing by $25/oz to $445-495/oz from $420-$470/oz. We have now incorporated this guidance into our model. As a result, our NAV was revised downward by $0.40/sh. We do note that the fire at Meadowbank accounts for only 50kozs of the 50-80kozs and we await Q1 results to assess where else we should be trimming our 2011FY production figures.”

On February 16th, AEM reported organic reserves up 5% vs. CS expectations of 9-14%: “AEM reported reserves of 21.3Mozs, up from 18.4Mozs in 2009 in-line AEM’s target of 20-21Mozs by year end 2010. However, this target was set prior to the Meliadine acquisition. We calculate organic reserves increasing by 5% or 1.1Mozs. We have now incorporated these reserves and resources into our model, which resulted in a negative revision to our DCF of ~$3.00/sh the result of negative adjustments to our assumptions for Meadowbank, Pinos Altos district and Meliadine.”

2011 EPS revised downward: “Our 2011 EPS has been revised substantially from $2.62 to $2.13 as a result of incorporating March 29th negative production guidance for 2011. 2012 EPS underwent a slight upward revision to $3.01 from $2.97 as a result of lower interest and exploration expense forecasts.”

Valuation: “Our target price of $77.00/sh (revised from $82.00) is based on a target P/NAV multiple of 1.4 times our DCF of $54.79/sh (revised from $57.68) with net cash of $0.41 (revised from $0.98) added at par.”