Sector Snap: Goldman Concerned On Asset Managers

The upgrade came because of three trends the analysts identified: better investment performance than peers this quarter, with funds down less than 5 percent, compared with an average 14 percent; positive inflows from investors; and its asset-allocation focus. They raised their earnings estimate for 2009 to $1 per share from 86 cents. That's above the average estimate of 92 cents per share from analysts polled by Thomson Reuters.

Waddell & Reed shares gained 92 cents, or 5.8 percent, to $17.15 in afternoon trading.

Shares of Eaton Vance, which was cut to "Neutral" from "Buy," lost $1.67, or 7.9 percent, to $19.52. The analysts said its key equity product, a Large-Cap Value fund. is starting to lag its peers, and the weak performance is leading investors to pull money out.

Goldman also reiterated "Sell" ratings on Federated Investors Inc. and T. Rowe Price.

Shares of Federated lost $1.05, or 4.8 percent, to $20.82, while T. Rowe slid $2.78, or 9.8 percent, to $25.62.

They also kept a "Buy" rating on BlackRock Inc., which nevertheless fell with the sector and the broader market. BlackRock shares lost $7.97, or 6.5 percent, to $114.02.