Valued with a market capitalization of $11.7 billion, Franklin Resources, Inc. (BEN) is an asset management company based in San Mateo, California. It offers a wide range of investment solutions, including equities, fixed income, multi-asset and alternative strategies, to individual, institutional and sovereign clients in more than 150 countries.
This asset management company has underperformed the broader market over the past 52 weeks. BEN shares have gained 8.3% during this period, while the broader S&P 500 index ($SPX) has gained 17.7%. Additionally, on a year-over-year basis, the stock is up 11.2%, compared to SPX’s 16.6% rally.
To narrow the focus, BEN has also lagged the iShares U.S. Financial Services ETF’s (IYG) 19.3% return over the past 52 weeks and 13.2% year-over-year gain.
On August 1, BEN shares fell marginally after the release of its third-quarter results, despite reporting better-than-expected performance. The company reported operating income of $2.1 billion and adjusted earnings per share of $0.49, both above analyst estimates. However, due to lower investment management fees, its overall total revenue declined 2.8% year over year, while its adjusted EPS fell an even more notable 18.3% from the prior-year quarter, which might have overshadowed the positives.
For the current fiscal year, which ends in September, analysts expect BEN’s EPS to decline 11.3% year over year to $2.12. The company’s history of earnings surprises is mixed. It surpassed or met consensus estimates in three of the last four quarters, although it missed them on another occasion.
Among the 13 analysts covering the stock, the consensus rating is “Hold,” which is based on three “Strong Buy” ratings, five “Hold” ratings, one “Moderate Sell” rating, and four “Strong Sell” ratings.
This setup is slightly more bullish than a month ago, with two analysts suggesting a “Strong Buy” rating.
On October 21, Barclays maintained an “underweight” rating on BEN and lowered its price target to $20.
The average price target of $24.67 represents a 9.1% premium to BEN’s current price levels, while the Street’s high price target of $31 suggests 37.1% upside potential.
On the date of publication, Neharika Jain had no (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com