NEW YORK (TheStreet) -- Shares of Eaton Vance Corp. (EV - Get Report)  are down 0.07% to $41.70 after the company was downgraded at Citigroup today to "sell" from "neutral," with its price target raised to $38 from $35.

The investment management and advisory services firm's exchange-traded managed fund (ETMF) potential seems "overplayed," analysts said.

"With the stock gapping up 17% on Friday 11/7, we believe the shares have overshot economic potential of nascent ETMF business while looking past both the complexities associated with the launch/adoption along with still mixed real-time long-term flow dynamics," analysts said.

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"[We] lift target $3 for potential growth nonetheless to $38. New target assumes ETMF adoption rate will track the ETF industry, resulting in potentially $1.5T in AUM-related licensing earnings," analysts added.

Separately, TheStreet Ratings team rates EATON VANCE CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate EATON VANCE CORP (EV) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EV's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, EATON VANCE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 235.9% when compared to the same quarter one year prior, rising from $23.20 million to $77.94 million.
  • Net operating cash flow has significantly increased by 191.72% to $151.30 million when compared to the same quarter last year. In addition, EATON VANCE CORP has also vastly surpassed the industry average cash flow growth rate of -227.20%.
  • 36.97% is the gross profit margin for EATON VANCE CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.20% trails the industry average.
  • You can view the full analysis from the report here: EV Ratings Report

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