Yamana Gold Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Shareholders might have noticed that Yamana Gold Inc. (TSE:YRI) filed its annual result this time last week. The early response was not positive, with shares down 2.7% to CA$6.09 in the past week. The result was positive overall - although revenues of US$1.6b were in line with what the analysts predicted, Yamana Gold surprised by delivering a statutory profit of US$0.21 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Yamana Gold

Following the latest results, Yamana Gold's eight analysts are now forecasting revenues of US$1.94b in 2021. This would be a substantial 24% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 81% to US$0.39. In the lead-up to this report, the analysts had been modelling revenues of US$1.98b and earnings per share (EPS) of US$0.51 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of US$7.88, suggesting the downgrades are not expected to have a long-term impact on Yamana Gold's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Yamana Gold at US$12.06 per share, while the most bearish prices it at US$7.42. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Yamana Gold is forecast to grow faster in the future than it has in the past, with revenues expected to grow 24%. If achieved, this would be a much better result than the 2.6% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 8.6% next year. Not only are Yamana Gold's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$7.88, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Yamana Gold going out to 2023, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Yamana Gold that we have uncovered.

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