BOSTON—Citi Investment Research on Monday cut its investment rating on Eaton Vance Corp., saying the investment manager is losing market share with individual investors. Shares of Eaton Vance fell 5 percent in midday trading.
Analyst William Katz cited October data released on Friday by fund industry consultant Strategic Insight showing Eaton Vance losing share to rivals such as BlackRock Inc., Franklin Resources Inc., T. Rowe Price Group Inc. and Invesco Ltd., as well as the industry at large. He said cash flows have lagged at Eaton Vance's stock funds as well as its bond funds.
The Boston investment company is "clearly losing retail market share" among individual investors in the U.S., Katz said. Those investors represent about half of the company's business, relative to institutional clients.
Katz also noted recent disappointing performance at Eaton Vance's $13.1 billion Large-Cap Value Fund. It is trailing 82 percent of comparable large-value stock funds this year, with a 4.5 percent investment loss, according to Morningstar.
"The flow picture is getting progressively worse for Eaton Vance," Katz said. He said the broader industry's profile was "uneven," but Eaton Vance's trends were negative.
Katz cut his rating of Eaton Vance's shares to "Sell" from "Neutral," and reduced his 12-month price target for the stock to $22 from $23.
An Eaton Vance representative declined to comment on Monday.
Shares of Eaton Vance fell $1.30 to $24.22. The stock traded as low as $20.07 on Oct. 4. It's come off sharply from a 52-week high of $34.09 on April 29, and is down about 20 percent this year.