UPDATE: Morgan Stanley Downgrades AuRico Gold As Execution Is Priced In

In a report published Thursday, Morgan Stanley analyst Brad Humphrey downgraded the rating on

from Equal-Weight to Underweight, and lowered the price target from $4.60 to $4.30. In the report, Morgan Stanley noted, “AUQ's management has done an impressive job with the ramp-up of the Young-Davidson (YD) mine, which is now atabout the halfway mark. YD achieved an underground mining rate of 3,752tpd in 3Q14, putting itat 94% of its year-end target.The underground unit mining costs of $41/t were also approaching year-end guidance of $40/t. AUQ shares have responded positively to these results, and the stock has outperformed its peer group since 2H14. Consensus remains bullish with 9 buys, 4 holds,and 1 sell. Given AUQ's premium valuation (vs our coverage group), we believe the market is not reflecting the inherent risks remaining at YD, which is still ~2 years from its design underground mining rates of 8,000tpd. And although the ramp-up has been successful to date, we do not believe the stock's premium is justified at this stage. In our view, New Gold (NGD) provides investors with a stronger risk-reward profile at current levels.” AuRico Gold closed on Wednesday at $3.69.