UPDATE: Citi Downgrades Eaton Vance to Sell from Neutral, Drops PT to $37.00 from $40.00

In a report published Thursday, Citi analyst William Katz downgraded Eaton Vance Corporation

to See from Neutral, dropping its price target to $37.00 from $40.00. According to the report, the downgrade follows underlying flow dynamics continue to worsen. The analysts see C2014 as a turbulent flow year for EV, led by low(er) impact implementation services. “Based on November/December AUM disclosure, we estimate approximately $100M net inflows for the two month period, or essentially flat organic growth,” the report noted. “However, we point out: 1) ex Implementation Services (IS), which carry ~11 bps fee rates, LT organic growth was negative; 2) further, if we strip out Floating Rate, where capacity issues are mounting, LT organic attrition has accelerated; and, 3) EV is no longer generating outsized organic or EPS growth, which we see as the bull argument.” EV closed Wednesday at $40.69.