Barclays Initiates Coverage on Franklin Resources with Underweight Rating and $20.00 Price Target
Barclays recently started covering Franklin Resources (NYSE: NYSE:) with an Underweight rating and a price target of $20.00. The assessment highlights challenges in the investment management company's active equities and fixed income segments, leading to a cautious outlook on its future performance.
Despite the recent acquisition of Putnam Investments, Franklin Templeton, the brand under which Franklin Resources operates, continues to face pressure in its core investment areas. The alternatives business has seen growth through mergers and acquisitions but is struggling with low inflows and negative performance over the past eight quarters.
Barclays pointed out the flat assets under management (AUM) in the alternatives sector as a key factor in setting the price target. The firm also raised concerns about potential regulatory and reputational risks surrounding the Western fixed income franchise.
In response to the initiation of coverage, Franklin Resources has not made any public statements. Recent developments include an increase in adjusted operating income and assets under management, as well as the closure of a fund amidst an SEC inquiry.
Analysts' ratings on Franklin Resources vary, with TD Cowen maintaining a Hold rating and BMO Capital lowering its price target due to financial performance concerns. The company also launched U.S. exchange-traded funds tied to ether and increased its quarterly cash dividend.
InvestingPro Insights: Franklin Resources (NYSE: BEN) presents a mixed picture with a market capitalization of $10.85 billion and a P/E ratio of 12.9. Despite some valuation concerns, the company has a track record of dividend consistency and a solid liquidity position. The InvestingPro platform offers additional insights for investors to consider.
Overall, investors should weigh these metrics and tips alongside recent price volatility and analyst predictions. Despite challenges highlighted in the Barclays report, Franklin Resources' commitment to profitability and potential for growth may offer opportunities for investors.
In conclusion, Franklin Resources' financial health and market position are key factors for investors to monitor, especially in light of recent developments and external assessments. By staying informed and utilizing analytical tools, investors can make informed decisions about their investments and financial future.