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With a market cap of around $11 billion, Franklin Resources, Inc. (BEN) is a global investment management firm. The San Mateo, California-based company provides various investment solutions, including mutual funds, institutional accounts, and asset management services under various brands.
Shares of the investment manager have significantly underperformed the broader market over the past 52 weeks. BEN has declined 9.5% over this time, while the broader S&P 500 Index ($SPX) has rallied 31.3%. In 2024, shares of BEN are down 27.6%, compared to SPX’s nearly 20% gain on a YTD basis.
Focusing more closely, Franklin Resources has also lagged behind the Health Care Select Sector SPDR Fund's (XLF) 46.5% return over the past 52 weeks and a 31.2% YTD gain.
Shares of Franklin Resources dropped 3.3% after its Q4 earnings release on Nov. 4 due to lower-than-expected adjusted earnings of $0.59 per share. Investors were also concerned by a 43.3% surge in operating expenses, which outpaced revenue growth, leading to a negative operating margin of 6.8%. Furthermore, the company reported long-term net outflows of $31.3 billion, signaling challenges in maintaining asset growth despite an increase in assets under management (AUM).
For the current fiscal year, ending in September 2025, analysts expect BEN’s EPS to grow 5.4% year-over-year to $2.52. The company's earnings surprise history is mixed. It topped the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Sell.” That’s based on seven “Holds,” two “Moderate Sells,” and five “Strong Sells.”
On Nov. 5, Deutsche Bank downgraded its price target on Franklin Resources to $19 and maintained a Hold rating after the company's "mixed" Q3 report.
As of writing, BEN is trading above the mean price target of $20.38. The Street-high price target of $22, implies a potential upside of only 2% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
