07:09 AM EDT, 07/11/2017 (MT Newswires) -- Alio Gold (ALO) received a price-target reduction Tuesday from RBC Capital Markets, as the firm said improvements the Canada-based gold producer has made are already reflected in its share price.

The new price target is CAD7, down from CAD8, with the firm saying the reduction reflects dilution from a recent equity raise. The reduced target is still above the Canadian shares' Monday closing price of CAD5.28. The target translates to about USD5.42, which is above the US shares' Monday closing price of USD4.12. The firm kept its investment rating on the stock at sector perform with a speculative-risk qualifier.

RBC highlighted that Alio Gold "has made solid progress revitalizing its Mexican assets including doubling forecast life of mine production from San Francisco and further de-risking development of the Ana Paula project."

The changes the company has made include the replacement of nearly all of Alio's executive team, which RBC said "has already made a number of positive changes and we believe the team can sustain the recent re-rating in the company's shares by executing on the road map it has outlined."

However, the firm said, "we believe these changes have been reflected in Alio's share price and see limited near-term upside given negative free cash flow and elevated development risk." It added: "While we consider the recent re-rating sustainable, we see only limited near-term upside given our view that the near-term challenges facing Alio, including negative free cash flow, funding needs, and elevated execution risk, are likely to be near-term headwinds."

Price: 4.12, Change: , Percent Change: