In a research report released Thursday, HSBC analyst Botir Sharipov reiterated a Hold rating on shares of Yamana Gold Inc. (USA) (NYSE:AUY), while raising the price target to $5.00 (from $3.40), as positive newsflow gets things moving in the right direction.
Sharipov explained, “In our previous note on Yamana Gold we argued that Yamana would have a much better 2016 (vs 2015) thanks to the company’s cost reduction initiatives, weaker on average FX, growing exposure to EM jurisdictions and positive changes in Argentina, amongst others catalysts. In line with our expectations and despite lower q-o-q production (1Q is typically the weakest), the company managed to keep gold cash costs broadly flat in 1Q, while lowering silver production costs and generated USD36m in positive FCF.
“After updating for 1Q results and as a result of other changes to our model, namely, lower estimated operating costs and slightly higher production at several assets, the inclusion of the RDM mine in our forecasts, the removal of the special 50% discount on the Suyai project in Argentina and higher 12-month target silver price of USD18/oz (previously USD17/oz), we raise our TP to USD5.00,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Botir Sharipov has a yearly average return of 15.2% and a 83.3% success rate. Sharipov has a average return when recommending AUY, and is ranked #1133 out of 3913 analysts.