AOL's stock slips after downgrade by RBC analyst

AOL's stock sags after RBC Capital Markets analyst downgrades, warns of more challenges ahead

Associated Press

SAN FRANCISCO (AP) -- AOL Inc.'s stock slipped Monday after an analyst released a report cautioning that the Internet company will be hard-pressed to generate the growth needed to propel its shares much higher.

Mark Mahaney of RBC Capital Markets lowered his rating on AOL's shares to "sector perform" from "outperform." He maintained a price target of $46.

The stock shed $1.09, or 2.4 percent, to close at $44.46. It's still up 50 percent this year.

Mahaney said that he is worried that more online advertising will shift to Google Inc., Facebook Inc. and Twitter at the same time AOL is being hurt by a decline in the average prices for digital marketing messages.

AOL's losses from its Patch network of community news sites also are a concern, Mahaney wrote. AOL, based in New York, laid off about half of Patch's staff earlier this year to cut its losses in that division.

Messages left seeking comment from AOL were not immediately returned.

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