What: Yamana Gold (AUY) shares slumped just more than 10% by 3:30 p.m. EST on Thursday. There was a lot weighing on the stock today, including a weaker gold price, an analyst downgrade, and the release of its preliminary results and future outlook.
So what: We'll start with the price of gold, which was down nearly $10 per ounce, or about 1%. That drop also weighed on a number of Yamana's peers, with Goldcorp (GG) and Kinross Gold (KGC 3.99%) also slumping. Goldcorp only fell 6%, while Kinross Gold was down just 5%.
One of the big reasons why Yamana Gold endured a steeper decline was due to its stock being downgraded by Barclays. The bank lowered its rating to equal weight from overweight, while also reducing its price target from $3.50 to $2.50. In doing so, it cited weakening fundamentals, which will likely put a lid on metal prices in 2016. Yamana wasn't the only gold miner to be downgraded this week; it joined Goldcorp, which was downgraded by Credit Suisse yesterday. The analyst firm cited concerns about Goldcorp's production outlook.
Speaking of production outlooks, Yamana Gold offered its outlook for 2016-2018 along with its preliminary results for 2015. Those preliminary results were a bit weaker than the company's guidance, with production toward the lower-end of its guidance, while costs were above what it expected. Meanwhile, its future outlook was a bit light, with cash costs expected to be above 2015's level.
Now what: Gold miners live and die with the price of gold. When gold falls, it will take these stocks with it. Add on some additional weight -- like downgrades and missed expectations -- and it can really make for a tough day.
