Franklin Resources (BEN) AI Stock Analysis

• Market Cap: $12.52B
• Dividend Yield: 5.37%
• Average Volume (3M): 4.55M
• Price to Earnings (P/E): 34.5
• Beta (1Y): 1.03
• Revenue Growth: 7.02%
• EPS Growth: -60.38%
• Country: US
• Employees: 10,000
• Sector: Financial
• Sector Strength: 78
• Industry: Asset Management
• EPS (TTM): 0.47
• Shares Outstanding: 525,521,300
• 10 Day Avg. Volume: 3,695,746
• 30 Day Avg. Volume: 4,548,308
• PEG Ratio: 3.31
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 18.36
• Enterprise Value/Market Cap: 1.73
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 4.08
• Enterprise Value/Ebitda: 3.68
• 1Y Price Target: $20.61
• Price Target Upside: -13.48% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 70 Outperform
• Price Target: $25.00 ▲(4.95%Upside)

Franklin Resources has strong technical indicators and a robust dividend yield, which are offset by valuation concerns and mixed earnings call insights. The financial performance shows stability but has room for improvement in profitability and cash flow management.

Positive Factors

Earnings Outlook

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

Growth Potential

Private markets fundraising rose significantly, indicating strong growth potential.

Revenue Prospects

Fee-rate related improved revenue prospects and unchanged expense forecasts are a good combination.

Negative Factors

Asset Management

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

Remain underweight on the stock due to relatively more attractive opportunities elsewhere.

Franklin Resources Business Overview & Revenue Model

Company Description

Franklin Resources, Inc., known as Franklin Templeton, is a global investment management organization headquartered in San Mateo, California. It operates in the financial services sector, providing investment solutions to individual investors, institutions, and financial professionals. The company's core offerings include mutual funds, exchange-traded funds (ETFs), retirement products, and alternative investment solutions. With a presence in over 30 countries, Franklin Templeton leverages its global expertise to deliver diversified investment products and services to its clients.

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 demonstrates steady revenue growth and strong operational efficiency with a solid Gross Profit Margin. However, the Net Profit Margin decline and modest Return on Equity indicate profitability challenges. The strong equity structure and low leverage are positives, though declining Free Cash Flow is a concern.

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
EBITDA	1.26B	1.38B	1.95B	2.36B	2.84B	1.43B
Net Income	404.30M	464.80M	882.80M	1.29B	1.83B	798.90M
Balance Sheet
Total Assets	31.99B	32.46B	30.12B	28.06B	24.17B	20.22B
Cash, Cash Equivalents and Short-Term Investments	3.54B	4.41B	4.40B	4.78B	4.65B	3.96B
Total Debt	13.19B	13.09B	11.75B	9.36B	7.59B	4.97B
Total Liabilities	16.81B	17.90B	16.55B	14.24B	11.42B	8.71B
Stockholders Equity	12.35B	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: 23.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 23.82 is above the 20-day moving average (MA) of 22.08, above the 50-day MA of 20.84, and above the 200-day MA of 19.89, indicating a bullish trend. The MACD of 0.64 indicates Negative momentum. The RSI at 75.01 is Negative, neither overbought nor oversold. The STOCH value of 72.70 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
TROW	81 Outperform	$20.92B	10.77	19.47%	5.28%	6.51%	4.52%
SEIC	80 Outperform	$11.15B	19.49	26.62%	1.09%	10.23%	26.56%
IVZ	76 Outperform	$7.03B	12.58	5.50%	5.35%	5.69%	―
AMG	76 Outperform	$5.62B	15.51	12.81%	0.02%	-6.37%	-28.43%
CG	73 Outperform	$18.48B	17.28	20.38%	2.76%	81.86%	―
BEN	70 Outperform	$12.52B	34.50	2.84%	5.37%	7.02%	-60.38%
Sector *	67 Neutral	$16.66B	11.44	9.71%	3.91%	11.61%	-10.70%

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.