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Franklin Resources, Inc. (BEN), with a market cap of $11.5 billion, is a prominent global investment management firm headquartered in San Mateo, California. The company primarily earns revenue and net income through its investment management services, catering to retail mutual funds, institutional and private accounts, and other investment products under its renowned brands, including Franklin, Templeton, and Legg Mason.
Shares of the leading asset management company have underperformed the broader market considerably over the past year, touching its 52-week low of $21.45 on Aug. 2. BEN has declined 22.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 18.5%. In 2024 alone, Franklin Resources stock dropped 26.6%, while $SPX rose 12.1% on a YTD basis.
Narrowing the focus, BEN trails behind the iShares U.S. Financial Services ETF’s (IYG) 19.7% gain over the past year and 10.8% return on a YTD basis.
Franklin Resources announced its Q3 earnings report on Jul. 26, and the market reacted negatively, sending the stock down 2.4%. Despite beating Wall Street’s revenue and EPS estimates, the company’s net income declined by 23.5% year over year to $174 million, worrying the investors.
For the current fiscal year, ending in September, Street expects BEN’s EPS to decline 6.9% year over year to $2.42. Franklin Resources’ earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
The consensus rating among the 12 analysts covering BEN stock is a “Moderate Sell.” That’s based on seven “Hold” ratings, two “Moderate Sells,” and three “Strong Sells.”
This configuration has been consistent over the past months.
On July 29, TD Cowen analyst Bill Katz maintained a “Hold” rating on Franklin Resources stock and increased the price target from $23 to $24.
The mean price target of $24.31 suggests an 11.1% premium to BEN from current levels. The Street-high target of $30 represents an upside potential of 37.1%.
On the date of publication, Kritika Sarmah 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.
