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San Mateo, California-based Franklin Resources, Inc. (BEN) is an asset management holding company. It offers investment management and related services to retail mutual funds, institutional and private accounts, and other investment products. With a market cap of $10.9 billion, Franklin Resources’ operations span the Americas, Europe, Indo-Pacific, and internationally.
Companies worth $10 billion or more are generally described as "large-cap stocks," Franklin Resources fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the asset management industry.
Despite its strengths, Franklin Resources has dipped 31.5% from its 52-week high of $30.32 achieved on Dec. 27, 2023. BEN had dipped 9.1% over the past three months, lagging behind the S&P 500 Index’s ($SPX) 4.7% gains during the same time frame.
Over the longer term, Franklin Resources’ stock has declined 30.3% in 2024 and 17% over the past 52 weeks, substantially underperforming SPX’s 19.9% returns on a YTD basis and 32.4% gains over the past year.
To confirm the bearish trend, BEN has been trading below its 50-day and 200-day moving averages since mid-April.
Shares of Franklin Resources saw a marginal uptick after the release of its Q3 earnings on Jul. 26. The company reported a 7.8% year-over-year growth in operating revenues, reaching $2.1 billion, and its adjusted EPS of $0.60 surpassed the consensus estimates by 5.3%. However, due to mounting operating expenses, its net margin narrowed by 3.3% to 8.2%, leading to a 23.5% decline in net income, falling to $174 million, compared to the year-ago quarter.
The ongoing SEC and DOJ investigation into Franklin Resources’ subsidiary Western Asset Management for cherry-picking lucrative trades for favored clients at the expense of others has also attracted negative publicity for the company and led to a substantial outflow of assets under management.
Franklin Resources’ competitor, T. Rowe Price Group, Inc. (TROW), is up 2.5% over the past year and experienced marginal gains in 2024, outperforming BEN’s double-digit decline.
Among the 14 analysts covering the BEN stock, the consensus rating is a “Moderate Sell.” The mean price target of $22.55 suggests a potential upside of 8.6% from current price levels.
On the date of publication, Aditya Sarawgi 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.
