Wells downgrades T. Rowe Price to sell, upgrades Franklin to neutral

Wells Fargo analyst Finian O’Shea downgraded T. Rowe Price (TROW) to Underweight from Equal Weight with a price target of $105, up from $95, while upgrading Franklin Resources (BEN) to Equal Weight from Underweight with a price target of $30, up from $24. Despite a strong market recovery in 2023, the traditional asset manager group underperformed the S&P 500 with “generally underwhelming flows and earnings results,” the analyst tells investors in a research note. The firm says that as a more constructive backdrop emerges, uncertainty persists for the traditional asset managers amid recent large increases in market levels. It continues to emphasize names with product and channel breadth and scalable franchises in higher flow markets. For T. Rowe, the firm says the company’s 2023 flows were “sharply disappointing, in large part causing the stock’s major underperformance despite strong equity market rallies. For Franklin, Wells says the company showed good progress in 2023 for flows and acquisition driven diversification, including in alternatives.