EOI - EOI: Targets Met Moving To Neutral (Rating Downgrade)

2024-04-04 12:50:34 ET

Summary

• EOI is an equity CEF that falls in the buy-write category.
• EOI has a strong correlation with the S&P 500 and a tradable discount to NAV.
• The CEF has outperformed the S&P 500 since we assigned it a 'Buy' rating eight months ago.
• Year-end targets for the S&P 500 from large banks have already been surpassed, indicating the potential for a market correction or stall.

Thesis

We last covered the Eaton Vance Enhanced Equity Income Fund (EOI ) eight months ago in this article, where we outlined for readers why we believed at the time the CEF was a better alternative to an outright S&P 500 purchase and our view on the name. Our thesis was delivered, with the targets on positive price move and discount narrowing met:

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