Citi Affirms Sell On Eaton Vance (EV)

Citi Investment Research is affirming its Sell rating and $25 price target on shares of Eaton Vance Corp. EV. In a research report sent to clients, Citi writes, "On the one hand, organic growth trends remain a bit better than expected. On the other hand: 1) pace of organic growth is decelerating, with mixed lead indicators; 2) EV continues to command premium valuation (17.5x '11 vs. 14.4x against key peers) despite overly reliant US retail AUM skew and uneven market share trends – losing equities share while garnering modest FI share; and, 3) consensus estimates remain too optimistic, we believe. We favor BEN/EV given superior valuation/positioning trade-offs, but would consider BLK/EV also as: 1) we see ETFs posing outsized competitive threat to EV; and, 2) incremental growth is coming from lower margin businesses." Shares of EV lost 34 cents on Friday to close at $30.44, a loss of 1.1%.