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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on BEN

Franklin Resources, Inc.'s recent performance was driven by strong AUM growth, acquisitions, and solid capital returns. The company's quarterly dividend of $0.32 per share represents a 3.2% increase over the same quarter last year. Additionally, Franklin Resources' recent earnings release showed a beat in Q3 earnings, with AUM rising sequentially. The company's growth opportunities in alternatives and international markets are also noteworthy. A $3.5 million line of credit agreement was also secured by its subsidiary.

1.c. Company Highlights

2. Franklin Templeton's Fiscal 2025 Earnings: A Strong Foundation for Growth

Franklin Templeton's fourth-quarter results showed adjusted operating revenues of $1.82 billion, a 13.9% increase from the prior quarter, and adjusted operating income of $472.4 million, a 25% increase from the prior quarter. The company's adjusted operating margin increased to 26% from 23.7%. For fiscal year 2025, adjusted operating revenues were $6.7 billion, a 2.1% increase from the prior year, and adjusted net income was $1.2 billion, a 6.3% decrease from the prior year. Earnings per share (EPS) came in at $0.67, beating analyst estimates of $0.57.

Publication Date: Nov -10

📋 Highlights
  • Public Market Outperformance:: 50% of mutual funds, ETFs, and composites outperformed peers/benchmarks across all time periods in 2025.
  • Private Markets Momentum:: Raised $22.9B in private markets, advancing toward a $100B 5-year fundraising goal with $270B in alternative AUM.
  • Tokenized AUM Growth:: Digital and tokenized assets surged 75% to $1.7B in 2025, driven by blockchain innovation and a first-to-market tokenized money market fund.
  • Distribution Strength:: Retail SMA, ETF, and Canvas AUM grew by 13%, 56%, and 71% YoY, with SMA CAGR of 21% since 2023.
  • Private Wealth Positioning:: Fiduciary Trust is primed to benefit from the $84T intergenerational wealth transfer expected by 2045.

Business Performance

The company's investment performance has been strong, with over 50% of its mutual funds, ETFs, and composites outperforming peers and benchmarks across all standard time periods. Private markets fundraising reached $22.9 billion, keeping the company on track to meet its 5-year $100 billion fundraising goal. The company's SMA business has grown at a 21% compound annual rate since 2023, driven by record positive net flows in retail SMAs, ETFs, and Canvas.

Growth Prospects

Franklin Templeton is well-positioned to capitalize on the trend favoring active management, with a strong foundation in public and private markets. The company expects to expand its alternatives business, with a target of $25 billion to $30 billion in fundraising for fiscal year 2026. The Lexington flagship fund is expected to reach a target size of around $25 billion, with a first close expected in the first half of 2026.

Valuation

With a P/E Ratio of 37.06 and a Dividend Yield of 5.76%, Franklin Templeton's valuation suggests that the market is pricing in a certain level of growth. The company's ROE of 2.5% and ROIC of 0.75% indicate that it is generating returns on equity and invested capital, although the Net Debt / EBITDA ratio of 8.25 may be a concern. The P/B Ratio of 0.94 suggests that the company's stock may be undervalued relative to its book value.

Outlook

For fiscal year 2026, Franklin Templeton expects its adjusted effective fee rate to remain stable, with higher growth in lower fee categories offset by higher fee alternative asset flows. The company anticipates revenue growth of around 4.6%, according to analyst estimates. With a strong foundation in place, Franklin Templeton is entering fiscal 2026 with clear momentum and excitement about the opportunities ahead.

3. NewsRoom

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Franklin's November AUM Edges Lower Despite Positive Markets

Dec -04

Source: zacks.com

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The Highest-Yielding Dividend Aristocrats Deliver 5%-6% Yields and Safety

Dec -04

Source: 247wallst.com

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Franklin Resources, Inc. Announces Preliminary Month-End Assets Under Management

Dec -03

Source: businesswire.com

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Best Dividend Aristocrats For December 2025

Nov -29

Source: seekingalpha.com

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Goldman Sachs Spotlights Dividend Stocks Using AI – 5 Strong Buys Now

Nov -26

Source: 247wallst.com

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Franklin Templeton Institute Forecasts Broadening Global Opportunities Amid Monetary Easing and Dollar Weakness in 2026

Nov -18

Source: businesswire.com

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Franklin Inorganic Expansion Efforts: A Catalyst for Future Growth?

Nov -17

Source: zacks.com

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Campbell & CO Investment Adviser LLC Acquires Shares of 16,308 Franklin Resources, Inc. $BEN

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.86%)

6. Segments

Investment Management Fees

Expected Growth: 2.8%

Franklin Resources, Inc.'s 2.8% growth in Investment Management Fees is driven by increasing assets under management (AUM) from strong market performance and net inflows, as well as expansion into new markets and products, such as sustainable and ESG-focused offerings, and strategic acquisitions.

Sales and Distribution Fees

Expected Growth: 3.2%

Franklin Resources, Inc.'s 3.2% growth in Sales and Distribution Fees is driven by increasing assets under management, expansion into new markets, and a shift towards higher-fee products. Additionally, the company's strategic acquisitions and partnerships have enhanced its distribution capabilities, leading to higher fees. Furthermore, the trend towards passive investing and demand for sustainable investment products have also contributed to the growth.

Shareholder Servicing Fees

Expected Growth: 2.9%

Franklin Resources' 2.9% growth in Shareholder Servicing Fees is driven by increasing assets under management, expansion of distribution channels, and a rise in demand for investment products. Additionally, the company's strategic acquisitions and partnerships have enhanced its servicing capabilities, leading to higher fees. Furthermore, the trend towards passive investing and the need for cost-effective solutions have also contributed to the growth.

Other

Expected Growth: 3.1%

Franklin Resources' 3.1% growth in 'Other' segment is driven by increasing demand for alternative investment products, expansion of its wealth management business, and strategic acquisitions. Additionally, the company's focus on emerging markets and growing presence in Asia have contributed to its growth.

7. Detailed Products

Franklin Templeton Mutual Funds

A range of mutual funds that cater to different investment objectives and risk profiles

Franklin Templeton Exchange-Traded Funds (ETFs)

A suite of ETFs that track various market indices and sectors

Franklin Templeton Alternative Investments

A range of alternative investment strategies, including private equity, real assets, and hedge funds

Franklin Templeton Institutional Investments

Customized investment solutions for institutional clients, including pension funds, endowments, and foundations

Franklin Templeton Retirement Services

A range of retirement plan solutions for employers and employees

Franklin Templeton Wealth Management

Comprehensive wealth management services for high-net-worth individuals and families

8. Franklin Resources, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Franklin Resources, Inc. operates in the financial services industry, which has a moderate threat of substitutes. While there are alternative investment options available, the company's diversified product offerings and strong brand reputation help mitigate this threat.

Bargaining Power Of Customers

Franklin Resources, Inc. has a large and diversified customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often tailored to meet specific customer needs, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

Franklin Resources, Inc. has a diverse supplier base, and the company is not heavily reliant on any single supplier. This reduces the bargaining power of suppliers and allows the company to negotiate favorable terms.

Threat Of New Entrants

The financial services industry has significant barriers to entry, including regulatory hurdles and the need for significant capital investments. This makes it difficult for new entrants to compete with established players like Franklin Resources, Inc.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. Franklin Resources, Inc. must continually innovate and improve its products and services to remain competitive in this environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.63%
Debt Cost 3.95%
Equity Weight 49.37%
Equity Cost 11.22%
WACC 7.53%
Leverage 102.55%

11. Quality Control: Franklin Resources, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Invesco

A-Score: 6.3/10

Value: 7.4

Growth: 2.9

Quality: 7.2

Yield: 7.0

Momentum: 7.5

Volatility: 5.7

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SEI Investments

A-Score: 6.3/10

Value: 4.1

Growth: 5.6

Quality: 9.2

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

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Franklin Resources

A-Score: 5.9/10

Value: 5.1

Growth: 3.4

Quality: 4.3

Yield: 8.0

Momentum: 6.5

Volatility: 8.0

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Affiliated Managers Group

A-Score: 5.7/10

Value: 5.8

Growth: 5.6

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 8.7

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TPG

A-Score: 4.3/10

Value: 1.3

Growth: 1.6

Quality: 6.0

Yield: 7.0

Momentum: 4.0

Volatility: 6.0

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StepStone Group

A-Score: 4.1/10

Value: 4.4

Growth: 2.0

Quality: 2.6

Yield: 4.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.4$

Current Price

23.4$

Potential

-0.00%

Expected Cash-Flows