The Globe and Mail reports in its Friday, Jan. 18, edition that RBC Dominion Securities analyst Mark Mihaljevic, citing a "skewed" risk-reward proposition for investors, lowered Alio Gold ($1.07) to "underperform" from "sector perform." The Globe's David Leeder writes in the Eye On Equities column that Mr. Mihaljevic reiterated his $1.50 share target. Analysts on average target the shares at $2.04. Mr. Mihaljevic pointed to a trio of factors for the downgrade: ongoing operational challenges, including the suspension of active mining at its San Francisco mine in Mexico and a lower output forecast for its Florida Canyon mine in Nevada; limited near-term free cash flow with a "tight" balance sheet and a "less attractive" valuation. Mr. Mihaljevic says in a note: "Our NAV for Alio has declined to $2.13 per share from $2.69 after updating our model for the new mine plan at Florida Canyon, suspension of San Francisco, and updated assumptions for Ana Paula. While recent updates have reduced uncertainty around the shares, our overall valuation has declined and Alio's relative valuation appears less attractive."
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