Is Franklin Resources Stock Outperforming the Dow?

Franklin Resources, Inc_ franklin-by luril Garmash via iStock

Franklin Resources, Inc. (BEN) is a global investment management company offering equity, fixed income, multi-asset, and alternative strategies through specialist investment managers. It serves retail, institutional, and high-net-worth clients via mutual funds, ETFs, and digital-asset products. The company is headquartered in San Mateo, California. The company has a market capitalization of $17.17 billion, which classifies it as a “large-cap” stock.

Franklin Resources’ stock reached a 52-week high of $34.17 on June 17, but is down 3.3% from that level. Strong performance (AUM hitting a record) has driven the stock up 39.6% over the past three months. The broader Dow Jones Industrial Average ($DOWI) is up 12% over the same period. Therefore, the stock has outperformed the wider index over this period.

Over the longer term, this outperformance persists. Over the past 52 weeks, the stock has gained 46.3%, while the Dow Jones index is up 22.3%. Franklin Resources’ shares have increased 38.3% year-to-date (YTD), while the index has gained 7.3%. The stock has been trading above its 200-day and 50-day moving averages since April.

This month, Franklin Resources launched its collateralized loan obligation (CLO) ETF, called the Franklin BSP CLO ETF, or YCLO. The fund draws on the depth of BSP’s Structured Credit platform, which manages over $9 billion in AUM, providing floating-rate income and diversification potential for fixed-income portfolios.

As of May 31, based on preliminary figures, Franklin had $1.78 trillion in AUM, up from $1.75 trillion at Apr. 30. This reflected the positive impact of markets and long-term net inflows of $4 billion.

We compare Franklin Resources’ performance with that of another asset management stock, Invesco Ltd. (IVZ), which has gained 91.2% over the past 52 weeks and 7.1% YTD. Therefore, BEN has been the clear underperformer over the past year.

Wall Street analysts are tepid on Franklin Resources’ stock. The stock has a consensus rating of “Hold” from the 12 analysts covering it. The mean price target of $31.32 implies a 5.2% downside from current levels. However, the Street-high price target of $37 indicates a 12% upside.

On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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