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Based in San Mateo, California, Franklin Resources, Inc. (BEN) is an asset management holding company that provides its services to individuals, institutions, pension plans, trusts, and partnerships. Valued at a market cap of $10.6 billion, the company launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries and is expected to announce its fiscal Q4 earnings results before the market opens on Monday, Nov. 4.
Ahead of this event, analysts expect the asset management company to report a profit of $0.60 per share, down 28.6% from $0.84 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion. In Q3, the company reported an EPS of $0.60, which topped the consensus estimates by 5.3%.
For fiscal 2024, analysts expect BEN to report an EPS of $2.41, down 7.3% from $2.60 in fiscal 2023. Nevertheless, EPS is expected to grow 8.3% year-over-year to $2.61 in fiscal 2025.
Shares of BEN have declined 32.5% on a YTD basis, significantly lagging behind both the S&P 500 Index's ($SPX) 22.9% surge and the Financial Select Sector SPDR Fund’s (XLF) 24.5% return over the same period.
On Aug. 21, shares of BEN plunged 12.6% amid investor concerns over an SEC investigation into top manager Ken Leech's treasury derivative trades. Following this news, investors withdrew a net $4.9 billion from two of Western Asset Management's flagship mutual funds, compounded by stagnant assets under management in the alternatives sector and the closure of its $2 billion Macro Opportunities strategy fund.
Despite reporting a better-than-expected Q3 performance, the stock fell 2.2% following its earnings release on Jul. 26 due to concerns over its declining fixed-income assets, which generate lower fees, and investor skepticism about the sustainability of equity market gains driven by AI-related stocks..
Analysts' consensus view on Franklin Resources’ stock is bearish, with a "Moderate Sell" rating overall. Among 14 analysts covering the stock, seven recommend "Hold," two suggest "Moderate Sell," and five indicate “Strong Sell.” The average analyst price target for BEN is $21.45, indicating a 6.6% potential upside from the current 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.
