Despite Disappointing 4Q, Yamana Gold's Outlook Remains Strong

Yamana Gold Inc.'s (AUY) outlook remains strong despite the gold miner's disappointing fourth quarter results, according to Blackmont analyst Richard Gray.

In a note to clients Mr. Gray said:

While Yamana's Q4/07 financial results were below our estimates (EPS of 6¢ versus our 17¢), it should be noted that Q4/07 was clearly a transitional quarter for Yamana.

We believe Q1/08 will be a more indicative quarter for the new Yamana and that progress over the course of the year at the core assets will be the primary catalyst for appreciation in the shares.

Catherine Gignac, analyst at Wellington West, maintained her "buy" rating and C$18 price target, noting Yamana's aggressive growth plans to double its production output within three years to 2.2 million ounces.

Comments

[gigem77]

Blackmont analyst Richard Gray needs to read the quarterly report. He and most of the other analysts were horribly wrong. They have been wrong about AUY every quarter in '07. Why? Production drops to 220k GEO in the 1st qtr '08. Even using $900 gold AUY with 668 million shares, will struggle to make .16 to .18 which is far short of the .24 avg estimate. So the anaylsts will cause disappointment again by overestimating earnings again.

[ED K]

IF YAMANA KEEPS MISSING THEIR ANAL-YST OVERESTIMATED EARNINGS ,IT WON'T BE LONG AND THE STOCK PRICE WILL BE IN THE LOW SINGLE DIGITS.THIS COMPANY SEEMS TO HAVE POTENTIAL BUT THE ANAL-YST COULD DESTROY IT.

[lon249]

Yamana is a great buy provided you are in for the long term(or at least past the second quarter)--there is huge potential for exponential profit increases now that the major acquistion costs are behind--buy Yamana now and watch your treasure chest grow!!

[maxbid]

Wait for a good bottom on the stock, don't rush out and buy it now. Then hold for about 2 years. Expect a good bottom buy to be anywhere around $14.

[Amidwesternneighbor]

$990?? Jim Cramer says gold is going to $1600. If it even goes to $1400, they beat estimates handily.

[gigem77]

900 is the number I'm using for the 1st qtr '08 which ends Monday. My point is that the analysts estimates are still too high inspite of guidance.