Thursday, January 21, 2010
Yamana Gold's improved outlook prompts upgrade to buy from neutral
New and improved forecasts for gold, silver and copper will bolster upside in Yamana Gold Inc. shares over the next year, says Dundee Securities analyst Ron Stewart.
Mr. Stewart upgraded Yamana to "buy" from "neutral" this week, raising his price target on the miner 50¢ to $14.50.
"We recommend investors consider YRI as a relatively stable and liquid precious metal equity based on the current outlook," the analyst said.
The update comes in the wake of Dundee's revised metals forecast that now anticipates gold bullion to average US$1,200 per ounce in 2010 versus its previous estimate of US$1,065 and US$1,325/oz in 2011, up from US$1,000.
Silver prices are expected to hit US$20 this year and US$22 in 2011, up from prior forecasts of US$17.50 and US$16.50, while copper price expectations increased to US$3.25 per pound from US$3 in 2010 and to US$3 from US$2.75 in 2011.
Mr. Stewart also raised his recommendation on Goldcorp Inc. to "buy" from "neutral," and increased his price target to $50 from $49.
"Given the increase in our valuation and the recent dip in the share price, we now consider [Goldcorp] to be undervalued," Mr. Stewart said.
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YAMANA GOLD INC.
YRI/TSX, $11.74, down 30¢
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