BMO Upgrades Yamana Gold, Says Many Catalysts Ahead

While Yamana Gold Inc’s AUY stock has a more attractive valuation than other miners of precious metals, there are some positive near-term catalysts, according to BMO Capital Markets.

The Yamana Gold Analyst: Jackie Przybylowski upgraded Yamana from Market Perform to Outperform while raising the price target from $8.25 to $9.

The Yamana Gold Thesis: While the stock has several “meaningful catalysts” through 2021, the most important one is the “technical study for the Canadian Malartic underground project, expected in February 2021,” Przybylowski said.

She added that analysts and investors may be underestimating the value of this project, and the details provided in this study may change that. Of all stakeholders, “Yamana has highest sensitivity to this project."

Przybylowski mentioned that Yamana Gold seems to be following an appropriate capital allocation strategy. Given its strong free cash flows and growing cash balance, its decision to raise the dividend by 50% is a good one. She further noted that 2021 is expected to “bring spending opportunities at Yamana’s projects (Canadian Malartic underground, Jacobina expansion, and progress at the Agua Rica development project).”

AUY Price Action: Shares of Yamana Gold had risen by 1.4% to $5.57 at the time of publication Monday.