Yamana Shares Drop As Growth Scrutinized

The stock fell 95 cents, or 5.8 percent, to $15.37.

Earlier this week, Canada-based Yamana posted fourth-quarter profit of $47.1 million, or 8 cents per share. Analysts polled by Thomson Financial, who typically exclude one-time charges, expected, on average, earnings of 19 cents per share.

Sales were $218.6 million, and analysts expected $304.2 million.

Credit Suisse analyst Anita Soni said the numbers reflect a poor period for Yamana, and that she is taking a "wait-and-see approach."

Fourth-quarter production was on the light side, yet costs at three mines were significantly higher than the third quarter, she said. With Yamana planning big for two of its mines, Soni said she wonders if the quarterly performance is "the low point before redemption or sign of things to come?"

With current metals prices at record highs, Soni said she will wait and see if Yamana can deliver on its planned expansion.

She kept her $20 price target and "Outperform" rating.

Davenport & Co. analyst Lloyd T. O'Carroll kept a bullish outlook, however, and praised Yamana's growth plans.

"We believe that the scarcity of production growth in this industry implies that a miner with a substantial growth profile should be valued at a premium to the group, not a substantial discount as is the case currently with Yamana," O'Carroll said in a note to clients.

He kept a "Strong Buy" rating and raised his price target to $28 from $23 per share.