Goldman Sachs Expects Eaton Vance to Underperform, Downgrades Shares to Sell

In a report published Monday, Goldman Sachs analyst Marc Irizarry downgraded

from Neutral to Sell and lowered the price target from $45.00 to $33.00. Goldman Sachs expects Easton Vance's first quarter results of 2014 to act as a “negative catalyst”. Irizarry commented, “We expect shares of EV to underperform given: (1) Decelerating flow trends and growing capacity concerns in floating rate funds (15% of AuM, 60% of flows in 2013); (2) EM exposure could drive flow/performance choppiness for Parametric and Global Macro Absolute (GMAR), together 10% of AuM; and (3) lackluster performance in the core equity business limits EV's participation in better industry flows.” The analyst's EPS estimate of $0.56 is 8% below consensus. Goldman Sachs cut FY2014, 2015 and 2015 EPS estimates due to lower flow estimates from +$8 billion to -$10 billion. The analyst's EPS estimates for 2014, 2015, and 2016 are $2.20, $2.28, and $2.58, respectively. Shares of Eaton Vance closed at $38.07 on Friday and are trading down 1.97% at $37.32 shortly after the opening bell.