UPDATE: Canaccord Genuity Downgrades Pan American Silver Corp. to Hold, Lowers PT Following Lower Price Forecasts

In a report published Wednesday, Canaccord Genuity analyst Rahul Paul downgraded the rating on

from Buy to Hold, and lowered the price target from $19.50 to $13.00. In the report, Canaccord Genuity noted, “We are lowering our recommendation on Pan American Silver to HOLD from Buy, and our 12-month target price to US$13.00 from US$19.50 following our revised commodity price forecasts and sector outlook. Over the next 12 months, we expect challenging capital market conditions to persist and only a modest improvement in gold and silver prices. While Pan American Silver has one of the strongest balance sheets in the sector (US$245 million in cash/ US$738 million in working capital as of March 31, 2013), we estimate that free cash flow would be limited (representing an FCF yield of 5% in 2014E and beyond) under our revised gold and silver price forecasts. Organic growth within the portfolio is limited (mill/pulp agglomeration circuit at Dolores and possible expansion at La Colorada – both pending completion of economic studies), and we expect that without a material improvement in the silver price and the situation in Argentina, Navidad will likely not be built.” Pan American Silver Corp. closed on Tuesday at $12.33.