On Monday, BMO Capital adjusted its outlook on shares of Franklin Resources (NYSE:BEN), a company listed on the New York Stock Exchange under the ticker NYSE:BEN. The firm's analyst lowered the price target to $26 from the previous $27 while keeping a Market Perform rating on the stock.
The revision reflects concerns regarding Franklin Resources' financial performance as it approaches fiscal 2025. The analyst noted that the company has not yet seen a sustained return to positive net flows. This challenge, combined with fee rate compression related to the mix of assets under management and only gradual margin improvement, suggests that earnings growth could be less robust than earlier projections.
The report from BMO Capital indicates a view of balanced risk/reward for Franklin Resources' shares. The analyst expressed a preference for Victory Capital Holdings, Inc. (NASDAQ: NASDAQ:VCTR) among diversified asset managers, implying a more favorable outlook for that stock within the sector.
Franklin Resources has been navigating an industry facing various pressures, including fee rate compression, which affects asset managers by reducing the fees they can charge for managing funds. These conditions impact the company's ability to grow earnings significantly.
Investors and market watchers will likely monitor Franklin Resources closely as it progresses towards fiscal 2025, assessing the company's strategies to counteract the challenges highlighted by BMO Capital and striving for financial improvement in the competitive asset management landscape.
In other recent news, the cryptocurrency sector has seen the launch of the first U.S. exchange-traded funds (ETFs) tied to ether, marking a significant milestone. The ETFs, from financial institutions such as VanEck, Franklin Templeton, Fidelity, 21Shares, Invesco, and BlackRock (NYSE:BLK), have started trading on different exchanges. Analysts believe this is a crucial step in integrating digital assets into the broader financial sector.
Meanwhile, Franklin Resources, operating as Franklin Templeton, has maintained its quarterly cash dividend at $0.31 per share. This represents a 3.3% increase from the dividend paid in the same quarter of the previous year. The company has also seen adjustments to its stock price target from several analyst firms, including TD Cowen, BofA Securities, and BMO Capital Markets, following its recent financial results and outlook.
TD Cowen reduced the stock's price target to $25.50, maintaining a Hold rating, while BofA Securities cut the price target to $23.00, maintaining its Underperform rating. BMO Capital Markets also lowered its price target to $27 from the previous $30, keeping a Market Perform rating. These adjustments reflect the company's recent performance and future earnings potential. These are the latest developments in the company's financial journey.
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