While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Yamana Gold (NYSE:AUY) slipped 2% this morning after TD Securities downgraded the gold producer from "buy" to "hold".
So what: Along with the downgrade, analyst Steven Green lowered his price target to $12 (from $13), representing about 18% worth of upside to yesterday's close. While contrarian investors might attracted to Yamana's steady decline in 2013, Green believes that the stock could remain pressured given the operational risks it continues to face.
Now what: TD believes Yamana is at risk of missing its already reduced full-year outlook. "With uncertainty around the company's growth projects and given the challenges in Argentina, which hosts the company's next leg of growth, we see limited near term positive catalysts for the stock," TD noted. "Additionally, with our new estimates, Yamana is currently trading at what we view as a fair valuation." Of course, with Yamana shares trading at book value and sporting a price-to-cash flow multiple of 7, that lack of short-term pop might be providing long-term Fools with a prudent play on gold.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.