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Franklin Resources (BEN)
NYSE:BEN
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Franklin Resources
(NYSE:BEN)
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Rating:69Neutral
Price Target:
$28.00
▲(3.44% Upside)
BEN scores as moderate overall, led by middling financial performance (margin compression, weaker free cash flow, and higher leverage). Technicals are a positive offset with price above major moving averages and supportive momentum indicators. Valuation is mixed—strong dividend yield but a relatively high P/E—and the earnings call adds support via strong inflows and a credible cost/margin improvement plan, tempered by Western Asset-related outflows and near-term performance headwinds.
Positive Factors
Consistent long‑term net inflows
Sustained long-term inflows materially grow fee-bearing AUM, stabilizing recurring management fee revenue and reducing reliance on episodic performance fees. This scale supports distribution leverage, underwriting of new products, and long-run revenue predictability even if markets fluctuate.
Scale in alternatives and private markets
Rapid alternatives growth shifts mix toward higher-fee, locked‑in capital that boosts margin sustainability and reduces public-market flow cyclicality. Established platforms (Lexington, Benefit Street, Clarion) improve cross-selling, recurring distributable returns, and long-term revenue visibility from private-market clients.
Broader product set and tech initiatives
Diversified products (ETFs, SMAs, Canvas) and digital/AI capabilities deepen distribution and lower operating costs over time. Tokenization and an AI-driven distribution hub can reduce transaction frictions, improve client retention, and scale personalized solutions, strengthening competitive positioning.
Negative Factors
Higher financial leverage
Elevated leverage reduces financial flexibility and raises interest and covenant risk during downturns, constraining capital allocation to buybacks or growth investments. For an asset manager, higher debt amplifies earnings pressure when fee growth or performance fees soften, limiting strategic optionality.
Material free cash flow decline
A large FCF drop strains liquidity for dividends, buybacks and reinvestment in distribution or technology. With performance‑fee volatility and episodic comp items, weaker cash generation narrows buffers for operating stress and lengthens the timeline to fully execute margin recovery plans.
Western Asset outflows and integration/regulatory drag
Persistent Western Asset outflows and the related integration/turnaround consume management attention, depress consolidated margins, and can deter institutional clients. Even with DOJ not pursuing charges, reputational and client reallocation effects can persist, slowing fixed-income recovery.
Franklin Resources (BEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.88B
Dividend Yield5.33%
Average Volume (3M)4.45M
Price to Earnings (P/E)24.5
Beta (1Y)0.92
Revenue Growth2.31%
EPS Growth5.71%
CountryUS
Employees10,000
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.70
Shares Outstanding521,390,700
10 Day Avg. Volume6,593,533
30 Day Avg. Volume4,451,577
Financial Highlights & Ratios
PEG Ratio3.21
Price to Book (P/B)0.99
Price to Sales (P/S)1.36
P/FCF Ratio13.05
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue1.38
Enterprise Value/Gross Profit1.71
Enterprise Value/Ebitda8.18
Forecast
1Y Price Target
$26.33Price Target Upside-2.72% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Franklin Resources Business Overview & Revenue Model
Company DescriptionFranklin 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 MoneyFranklin Resources primarily generates revenue through the management fees it charges for its investment products and services. These fees are typically calculated as a percentage of assets under management (AUM) and vary depending on the type of fund or account. Additionally, the company earns performance fees from certain investment products that outperform predetermined benchmarks. Franklin Templeton also benefits from sales of mutual funds and related investment products, with revenue boosted by distribution fees and commissions from financial intermediaries. Significant partnerships with financial advisors and institutions further enhance its distribution capabilities, contributing to its earnings. Furthermore, the company may experience fluctuations in revenue based on market performance and changes in AUM, which are influenced by investor sentiment and overall market conditions.
Franklin Resources Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights income from different business units, revealing which areas drive growth and profitability, and where strategic shifts may be needed.
Highlights income from different business units, revealing which areas drive growth and profitability, and where strategic shifts may be needed.
Data provided by:
The Fly
The FlyFranklin Resources Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong and broad-based commercial momentum — record long-term inflows, rising AUM, robust ETF and private markets fundraising, continued product diversification (Canvas, SMAs, Investment Solutions), and strategic tech initiatives (AI and tokenization). Short-term headwinds include fixed income outflows largely tied to Western Asset, some near-term performance declines in shorter time horizons, regulatory overhang that is easing but still affecting flows, and episodic performance-fee volatility. Management reiterated a disciplined expense approach with a $200M cost-savings target and margin improvement roadmap to >30% by 2027. Overall, positive operational and strategic progress outweighs the localized challenges.Q1-2026 Updates
Positive Updates
Record Long-Term Inflows and Strong Sequential/Year-over-Year Growth
Record long-term inflows of $118.6 billion for the quarter, up 40% from the prior quarter and 22% year-over-year. Long-term net inflows were $28.0 billion (or $34.6 billion excluding Western Asset), with the latter nearly double the prior year quarter ($34.6B vs $17.9B, ~93% increase) and marking a ninth consecutive quarter of positive comparable flows.
Assets Under Management and Asset-Class Breadth
Total AUM ended the quarter at $1.68 trillion with record AUM in three of four asset classes. Multi-asset AUM is nearly $200 billion with $4.0 billion of net inflows (18th consecutive quarter of positive net flows).
Equity and ETF Momentum
Equity net inflows were $19.8 billion (inclusive of $24.6 billion reinvested distributions). ETF AUM reached a new high of $58 billion with $7.5 billion of net flows (17th consecutive positive quarter); active ETF net flows were $5.5 billion, representing ~70% of total ETF net flows. 15 ETFs exceed $1 billion in AUM.
Private Markets and Alternatives Growth
Alternatives AUM totaled $274 billion. Alternatives fundraising was $10.8 billion during the quarter (including $9.5 billion in private market assets). Aggregate realizations and distributions were $4.8 billion. Lexington Partners' AUM rose to $83 billion, up 46% since acquisition in 2022. Private credit alignment (Benefit Street Partners) and the Apira acquisition expand direct lending capabilities in Europe.
Retail and Wealth Solutions Traction (Canvas, SMAs, Investment Solutions)
Retail SMAs AUM rose to $171 billion with $2.4 billion of net inflows; Canvas generated $1.4 billion of net flows and reached $18 billion in AUM (net flow positive since acquisition). Investment Solutions enterprise AUM surpassed $100 billion, underscoring demand for integrated, outcome-oriented solutions.
Product Diversification and Institutional Pipeline
Positive net flows across equity, multi-asset, alternatives and ETFs; excluding Western Asset, fixed income delivered its eighth consecutive quarter of positive net flows. Institutional 'won but unfunded' pipeline remains strong at $20.4 billion and fundraising was broadly diversified across alternative specialist teams.
Technology and Innovation: Digital Assets and AI
Digital asset AUM totaled $1.8 billion (approx. $900 million in tokenized funds and $800 million in crypto ETFs). Launched Intelligence Hub, an AI-driven distribution platform built on Microsoft Azure, and highlighted blockchain tokenization initiatives (Benji money market) with demonstrable transaction-cost reductions vs legacy rails.
Investment Performance and Recognition
Over half of mutual fund and ETF AUM outperform peer medians across 3-, 5- and 10-year periods; mutual fund performance improved in 5- and 10-year periods. Franklin Templeton recognized again as a top workplace in money management by Pensions & Investments.
Financial and Margin Progress
Adjusted operating income of $437.3 million. Management reiterated cost-savings plan ($200 million targeted) and expects flat FY26 expenses versus FY25 on a markets-flat basis (excluding performance fees). Guidance targets exiting fiscal 2026 with margins in the high-20s and achieving >30% operating margin by 2027 if strategic goals are met.
Negative Updates
Fixed Income Net Outflows (Western Asset Impact)
Fixed income net outflows were $2.4 billion for the quarter; Western Asset materially influenced fixed income flows. Management has provided expense support to Western Asset, which has weighed on consolidated margins by 'several points.'
Short-Term Investment Performance Weakness
Mutual fund performance declined modestly in the 1- and 3-year periods driven by select U.S. equity strategies; strategy composite performance declined in the 1- and 5-year periods, with the one-year weakness primarily driven by liquidity strategies.
Regulatory and Overhang at Western Asset (Residual Outflows)
Although DOJ indicated it would not pursue criminal charges (reducing regulatory uncertainty), Western Asset continued to experience client outflows and remains a source of elevated integration/turnaround focus and near-term volatility in flows.
Expenses and Performance-Fee Volatility
Adjusted operating income was impacted by lower performance fees and an annual deferred-compensation acceleration for retirement-eligible employees. Performance-fee timing and episodic compensation items add volatility to reported results; management excludes certain performance-fee-related items in expense guidance.
Private Capital Fundraising Environment Challenges
Some private capital fundraising remains 'well below averages' with clients seeking more liquidity in private equity; capital raising in certain segments (e.g., Clarion) faced a challenging environment despite positive returns, indicating pockets of slower institutional demand.
Company Guidance
Franklin guided to flat full‑year expenses vs. FY25 at flat markets (excluding performance‑fee comp), with a $200 million cost‑savings program (≈20% realized in Q1, remainder weighted to Q3/Q4); they expect to exit FY26 with operating margins in the high‑20s (flat markets) and target >30% by 2027 (30–35% range possible if strategic goals are met), noting Western Asset support has depressed margins by several points; Q1 adjusted operating income was $437.3 million; Q2 modeling assumptions include comp & benefits of about $860 million (incl. ~$30 million calendar resets and $50 million of performance fees at a 55% comp ratio), IS&T ~$155 million, occupancy ~$70 million, and G&A $190–195 million; tax rate guidance remains 26–28% (now expected toward the lower end); EFR is expected to be stable next quarter with potential upside in the back half of the year from alternative fundraising.Franklin Resources Financial Statement Overview
Summary
Fundamentals are mixed: revenue rebounded sharply, but profitability remains subdued versus prior-cycle levels (TTM net margin ~6%, EBIT margin ~10%) and ROE is low (~4%) with meaningful leverage (debt-to-equity ~1.10). Cash flow is a relative strength (TTM FCF ~$883M with decent conversion), though recent FCF growth/coverage signals are uneven.Income Statement
TTM (Trailing-Twelve-Months) revenue is up sharply (growth rate ~86%), but profitability is modest for the period: net margin is ~6% and EBIT margin ~10%. Looking across the annual history, margins and net income have compressed materially from the 2021–2022 peak (net margin ~16–22% then) to the 2024–TTM range (~5–6%), indicating weaker operating leverage and/or a tougher fee/market environment. The positive is that revenue has stabilized and improved recently, but the key watch item is whether margins can recover toward prior-cycle levels.65
Positive
Balance Sheet
The balance sheet looks generally stable with a large equity base (~$12.1B) versus total assets (~$32.5B), but leverage appears meaningful with debt-to-equity around ~1.10 in the most recent periods. Returns on equity are currently low (~4% in TTM and 2025 annual), well below the stronger 2021–2022 levels (~11–16%), suggesting reduced earnings power relative to the capital base. Overall: adequate capitalization, but elevated leverage and softened returns weigh on the quality of the balance-sheet profile.70
Positive
Cash Flow
Cash generation is solid: TTM operating cash flow is ~$956M and free cash flow is ~$883M. Free cash flow conversion is decent (free cash flow is ~86% of net income), supporting earnings quality. However, cash-flow momentum is mixed—TTM free cash flow growth is negative and operating cash flow covers only ~57% of net income in the provided data, pointing to some variability in cash realization versus accounting profits. Net-net, cash flow is a relative strength, but not consistently improving.60
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.77B | 8.48B | 7.85B | 8.28B | 8.43B |
| Gross Profit | 7.05B | 6.79B | 6.35B | 6.85B | 7.00B |
| EBITDA | 1.41B | 1.38B | 1.91B | 2.21B | 2.84B |
| Net Income | 524.90M | 464.80M | 882.80M | 1.29B | 1.83B |
Balance Sheet | |||||
| Total Assets | 32.37B | 32.46B | 30.12B | 28.06B | 24.17B |
| Cash, Cash Equivalents and Short-Term Investments | 3.57B | 4.41B | 4.40B | 4.78B | 4.65B |
| Total Debt | 13.30B | 13.09B | 11.75B | 9.36B | 7.59B |
| Total Liabilities | 18.18B | 17.90B | 16.55B | 14.24B | 11.42B |
| Stockholders Equity | 12.08B | 12.51B | 11.92B | 11.47B | 11.22B |
Cash Flow | |||||
| Free Cash Flow | 911.60M | 794.20M | 940.40M | 1.87B | 1.17B |
| Operating Cash Flow | 1.07B | 971.30M | 1.09B | 1.96B | 1.25B |
| Investing Cash Flow | -2.34B | -2.42B | -3.61B | -3.33B | -2.62B |
| Financing Cash Flow | 452.40M | 1.42B | 2.11B | 1.58B | 2.03B |
Franklin Resources Technical Analysis
Positive
27.07
Price Trends
24.01
Positive
23.37
Positive
22.81
Positive
Market Momentum
0.64
Negative
71.62
Negative
86.21
Negative
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 27.07 is above the 20-day moving average (MA) of 25.60, above the 50-day MA of 24.01, and above the 200-day MA of 22.81, indicating a bullish trend. The MACD of 0.64 indicates Negative momentum. The RSI at 71.62 is Negative, neither overbought nor oversold. The STOCH value of 86.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BEN.
Franklin Resources Risk Analysis
Franklin Resources disclosed 31 risk factors in its most recent earnings report. Franklin Resources reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Franklin Resources Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.88B | 25.58 | 31.85% | 1.52% | 13.01% | 21.96% | |
76 Outperform | $10.76B | 15.60 | 29.38% | 1.18% | 9.33% | 33.17% | |
73 Outperform | $6.24B | 7.65 | 10.58% | 5.30% | ― | ― | |
69 Neutral | $13.88B | 24.50 | 4.58% | 5.33% | 2.31% | 5.71% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $12.15B | -16.95 | -2.10% | 3.08% | 6.64% | ― | |
45 Neutral | $8.36B | ― | -750.11% | 2.17% | 92.02% | -1386.34% |
* Financial Sector Average
BEN
Franklin Resources
27.07
7.52
38.44%
IVZ
Invesco
27.41
9.85
56.09%
SEIC
SEI Investments Company
88.69
3.88
4.58%
HLNE
Hamilton Lane
141.38
-14.25
-9.16%
STEP
StepStone Group
69.81
8.29
13.48%
OTF
Blue Owl Technology Finance Corp.
13.15
-1.99
-13.14%
Franklin Resources Corporate Events
Business Operations and StrategyFinancial Disclosures
Franklin Resources Posts Strong Profit Growth and Inflows
Positive
Jan 30, 2026
On January 30, 2026, Franklin Resources reported a sharp improvement in profitability for the quarter ended December 31, 2025, with net income rising to $255.5 million, or $0.46 per diluted share, more than doubling the prior quarter and significantly above the year-earlier period, while operating income climbed to $281.0 million and operating margin strengthened to 12.1%. The firm highlighted continued business momentum driven by $28.0 billion in long-term net inflows and record assets under management, underpinned by strong demand across equity, multi-asset, alternatives, ETFs, retail SMAs and the Canvas platform; alternatives remained a major growth engine with $10.8 billion raised, including substantial private market capital and a $4.6 billion close for Lexington Co-Investment Partners VI, alongside the integration of Apera Asset Management into its expanded Benefit Street Partners-branded credit platform and resilient performance at Clarion Partners, reinforcing Franklin’s strategic push into alternatives and its positioning to benefit from structural shifts in both public and private markets while maintaining expense discipline.
The most recent analyst rating on (BEN) stock is a Sell with a $21.00 price target. To see the full list of analyst forecasts on Franklin Resources stock, see the BEN Stock Forecast page.
Business Operations and StrategyStock BuybackDividends
Franklin Resources Increases Dividend, Authorizes Stock Buyback
Positive
Dec 17, 2025
On December 11, 2025, Franklin Resources amended its credit agreement, increasing its senior unsecured revolving credit facility commitments by $400 million to a total of $1.5 billion, signaling enhanced financial flexibility for future operations. Additionally, on December 17, 2025, the company announced an increase in its quarterly dividend to $0.33 per share and authorized the repurchase of up to 20.8 million additional shares, bringing the total authorization to 40 million shares. These initiatives reflect a commitment to shareholder returns and stable financial growth.
The most recent analyst rating on (BEN) stock is a Sell with a $21.00 price target. To see the full list of analyst forecasts on Franklin Resources stock, see the BEN Stock Forecast page.
Legal Proceedings
Franklin Resources DOJ Investigation Resolved Without Charges
Positive
Dec 15, 2025
Franklin Resources, Inc. recently addressed an investigation by the U.S. Department of Justice into past trade allocations involving treasury derivatives managed by its subsidiary, Western Asset Management Company, LLC. On December 13, 2025, the DOJ indicated it is ready to resolve the investigation without filing criminal charges against Western Asset, acknowledging the company’s full cooperation in the matter.
The most recent analyst rating on (BEN) stock is a Sell with a $23.47 price target. To see the full list of analyst forecasts on Franklin Resources stock, see the BEN Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Franklin Resources Reports Q4 2025 Financial Results
Positive
Nov 7, 2025
On November 7, 2025, Franklin Resources, Inc. announced its preliminary financial results for the fourth quarter and fiscal year ending September 30, 2025. The company reported a net income of $117.6 million for the quarter and $524.9 million for the fiscal year, showing significant improvement from the previous year. The company experienced growth in long-term inflows across all asset classes, reaching $84.6 billion, and maintained a strong institutional pipeline. Despite a decrease in operating income compared to the previous quarter, Franklin Templeton achieved record growth in retail SMAs, ETFs, and alternative AUM, highlighting its strategic focus on diversification and expansion in both public and private markets.
The most recent analyst rating on (BEN) stock is a Sell with a $23.00 price target. To see the full list of analyst forecasts on Franklin Resources stock, see the BEN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.