Goldman upgrades Franklin Resources on private markets push

Goldman Sachs upgraded Franklin Resources (BEN) to Buy from Neutral with a $29 price target representing 25% upside to current levels. The company has made “meaningful progress” in expanding its business towards private markets business, with now almost 25% of management fees now coming from alternatives — among the highest exposures in the traditional managers group, the analyst tells investors in a research note. Goldman believes that as the “appetite for alternative products builds” from the wealth channel, Franklin Resources will be able to draw from its “expansive global retail distribution to drive growth at attractive fee rates.” It believes the company’s organic base fee growth will be closer to break-even over the coming quarters relative to the negative mid-single-digit decay over the last several years.