Analyst Note| Greggory Warren, CFA |
While there was little in narrow-moat Eaton Vance's fiscal fourth-quarter results that would alter our long-term view of the firm, we are increasing our fair value estimate to $63 per share from $56 per share to reflect the takeout price being paid by Morgan Stanley to acquire the firm (equal to $28.25 per share in cash plus 0.5833 shares of Morgan Stanley common stock at a price of $60.27 per share). Eaton Vance closed out the October quarter with $515.7 billion in assets under management, up 1.6% sequentially and 3.7% year over year. Net inflows of $5.2 billion were particularly robust, representing 4.2% annualized growth, with most of the flows coming from the firm's fixed-income segment. Even so, the firm closed out fiscal 2020 with annual organic growth at 1.0%, its lowest since fiscal 2014.