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Based in San Mateo, California, Franklin Resources, Inc. (BEN) is a publicly owned asset management holding company that offers investment management and related services to individuals, institutions, pension plans, trusts, and partnerships. Valued at a market cap of $10.9 billion, the company launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries and invests in public equity, fixed income, and alternative markets.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and BEN fits the label perfectly. The asset management company is known for its expertise in wealth management, investment management, and technology solutions and serves clients in over 155 countries.
Despite its strengths, the company has dipped 30.9% from its 52-week high of $30.32, achieved on Dec. 27, 2023. Moreover, it has gained 1.5% over the past three months, significantly underperforming the broader Nasdaq Composite’s ($NASX) 10.1% increase over the same time frame.
Moreover, over the past six months, shares of BEN are down 7.7%, massively lagging behind NASX’s 12.4% gains over the same time frame. BEN has plunged 30.3% over the past 52 weeks, significantly falling behind NASX’s 32.8% returns.
To confirm its bearish price trend, Franklin Resources has been trading below its 200-day moving average since mid-April and has remained below its 50-day moving average since mid-December.
On Nov. 4, shares of BEN fell 3.3% after its mixed Q4 earnings release. The company’s operating revenues increased 11.3% year-over-year to $2.21 billion and surpassed the forecasted figure by 4.2%. However, a striking 43.3% annual rise in operating expenses led to a net loss of $84.7 million in Q4, against a net income of $295.5 million recorded in the prior-year quarter. Moreover, BEN revealed long-term net outflows of $31.3 billion, indicating difficulties in maintaining asset growth. This might have further lowered investor confidence.
BEN’s underperformance becomes more evident when compared to its rival, Invesco Ltd. (IVZ), which declined marginally over the past 52 weeks and gained 19.3% over the past six months.
Looking at Franklin Resources’ recent underperformance, analysts remain moderately bearish about its prospects. The stock has a consensus rating of “Moderate Sell” from the 14 analysts covering it, and as of writing, the company is slightly trading above its mean price target of $20.39.
