Franklin Resources (BEN) AI Stock Analysis

• Market Cap: $11.24B
• Dividend Yield: 5.89%
• Average Volume (3M): 5.30M
• Price to Earnings (P/E): 31.0
• Beta (1Y): 1.04
• Revenue Growth: 7.02%
• EPS Growth: -60.38%
• Country: US
• Employees: 10,000
• Sector: Financial
• Sector Strength: 83
• Industry: Asset Management
• EPS (TTM): 0.47
• Shares Outstanding: 525,521,300
• 10 Day Avg. Volume: 6,024,354
• 30 Day Avg. Volume: 5,302,012
• PEG Ratio: 3.04
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.87
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: 0.61
• Enterprise Value/Gross Profit: 3.90
• Enterprise Value/Ebitda: 3.51
• 1Y Price Target: $19.80
• Price Target Upside: -7.30% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10

• Rating: 67 Neutral
• Price Target: ―

Franklin Resources presents a stable financial position with strong revenue growth and operational efficiency. Despite challenges in cash flow and profitability, the company's financial health remains solid. Technical indicators suggest caution due to potential overbought conditions, while valuation metrics highlight a high P/E ratio offset by a strong dividend yield. The earnings call points to both strategic progress and ongoing challenges, resulting in a cautiously optimistic outlook.

Positive Factors

Management Strategy

Raising EPS estimates and price target shows a favorable outlook for BEN.

Market Performance

BEN shares sharply outperformed on earnings day, initially reacting to solid F2Q results and then rallying more during the conference call.

Revenue Growth

Private markets fundraising rose significantly in F2Q, indicating strong growth potential.

Negative Factors

Asset Management Challenges

WAM continues to outflow, picking up to $10B, which is a concern despite other positive factors.

Operating Expenses

Lowering adjusted EPS due to higher general and administrative and information services/tech expenses.

Stock Recommendation

Despite positivity, the recommendation remains underweight due to relatively more attractive opportunities elsewhere.

Franklin Resources Business Overview & Revenue Model

Company Description

Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries. The firm invests in the public equity, fixed income, and alternative markets. Franklin Resources, Inc. was founded in 1947 and is based in San Mateo, California with an additional office in Hyderabad, India.

How the Company Makes Money

Franklin Resources makes money primarily through the management and advisory fees it charges for its investment products and services. These fees are generally based on a percentage of the assets under management (AUM), which means that as the value of assets managed by Franklin Templeton increases, so does its revenue. Additionally, the company earns money from performance-based fees on certain investment products that exceed specific benchmarks. Franklin Templeton also generates revenue through distribution fees for selling its mutual fund products and through fees related to its advisory services. The company's earnings are influenced by market conditions, investment performance, and its ability to attract and retain clients and assets. Strategic partnerships and acquisitions also play a role in expanding its product offerings and geographical reach, contributing to its overall revenue growth.

Franklin Resources Financial Statement Overview

Summary

Franklin Resources shows steady revenue growth and strong operational efficiency. The balance sheet reflects low leverage and strong equity, although ROE is below industry average. The decline in Free Cash Flow is a concern, but overall financials are stable with room for improved profitability.

Income Statement

Franklin Resources shows a steady revenue growth with a 2.3% increase from the previous year. The Gross Profit Margin is healthy at 61.1%, indicating efficient cost management. However, the Net Profit Margin has decreased to 4.7%, reflecting challenges in converting revenue into net income. The EBIT and EBITDA margins are relatively stable, suggesting consistent operational efficiency.

Balance Sheet

The company maintains a reasonable Debt-to-Equity Ratio of 0.08, indicating low leverage. Return on Equity (ROE) is modest at 3.3%, which is lower than the industry average, suggesting room for improvement in profitability. The Equity Ratio is strong at 38.6%, demonstrating a solid capital structure and financial stability.

Cash Flow

The Free Cash Flow has decreased by 17.9% compared to the previous year, indicating a decline in cash generation. The Operating Cash Flow to Net Income Ratio is robust at 2.17, showing strong cash flow relative to earnings. However, the Free Cash Flow to Net Income Ratio is slightly lower at 1.61, suggesting some cash flow pressure.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
8.67B	8.48B	7.85B	8.28B	8.43B	5.57B
	Gross Profit
5.30B	3.98B	4.36B	3.34B	3.35B	1.99B
	EBIT
848.10M	407.60M	1.10B	1.77B	1.88B	1.05B
	EBITDA
1.26B	1.38B	1.95B	2.36B	2.84B	1.43B
	Net Income Common Stockholders
404.30M	464.80M	882.80M	1.29B	1.83B	798.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.65B	4.41B	4.40B	4.78B	4.65B	3.96B
	Total Assets
32.39B	32.46B	30.12B	28.06B	24.17B	20.22B
	Total Debt
12.78B	13.09B	11.75B	9.36B	7.59B	4.97B
	Net Debt
9.13B	8.68B	7.35B	4.58B	2.94B	1.01B
	Total Liabilities
17.05B	17.90B	16.55B	14.24B	11.42B	8.71B
	Stockholders Equity
12.46B	12.51B	11.92B	11.47B	11.22B	10.11B
Cash Flow		Free Cash Flow
652.30M	794.20M	989.90M	1.87B	1.17B	917.70M
	Operating Cash Flow
877.50M	971.30M	1.14B	1.96B	1.25B	1.02B
	Investing Cash Flow
-3.03B	-2.42B	-3.58B	-3.33B	-2.62B	-3.24B
	Financing Cash Flow
1.56B	1.42B	2.03B	1.58B	2.03B	194.20M

Franklin Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BEN, the sentiment is Positive. The current price of 21.36 is below the 20-day moving average (MA) of 21.63, above the 50-day MA of 19.78, and above the 200-day MA of 19.93, indicating a neutral trend. The MACD of 0.47 indicates Positive momentum. The RSI at 55.24 is Neutral, neither overbought nor oversold. The STOCH value of 21.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BEN.

Franklin Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEIC	82 Outperform	$10.58B	18.49	26.62%	1.12%	10.23%	26.56%
TROW	78 Outperform	$20.30B	10.46	19.47%	5.33%	6.51%	4.52%
IVZ	77 Outperform	$6.47B	11.57	5.50%	5.71%	5.69%	―
AMG	70 Outperform	$5.13B	14.15	12.81%	0.02%	-6.37%	-28.43%
CG	70 Outperform	$16.35B	15.29	20.38%	3.09%	62.87%	―
BEN	67 Neutral	$11.24B	30.96	2.84%	5.89%	7.02%	-60.38%
Sector *	64 Neutral	$12.80B	9.71	7.59%	16985.66%	12.07%	-7.53%

Franklin Resources Corporate Events

Franklin Resources Reports Q1 2025 Financial Results

On May 2, 2025, Franklin Resources, Inc. reported its financial results for the quarter ended March 31, 2025, with a net income of $151.4 million, down from $163.6 million in the previous quarter but up from $124.2 million in the same quarter the previous year. Despite a challenging market environment, the company saw positive developments, including a 9% increase in long-term inflows and strong client demand for ETFs and private market assets. The firm also launched the Franklin Lexington Private Markets Fund, raising $2 billion in assets under management, and continued to expand its institutional pipeline, highlighting its strategic focus on innovation and client engagement.