Franklin Resources (BEN) has received a new Buy rating, initiated by BMO Capital analyst, .
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BMO Capital’s rating is based on several compelling factors that highlight Franklin Resources’ strong position and potential for growth. Despite challenges related to WAMCO, the core business of Franklin Resources remains robust, particularly with the strength of its alternatives platform. The company has demonstrated strong net flows, excluding WAMCO, and has shown significant fundraising momentum, especially through its Lexington platform. This momentum is further supported by the company’s ability to leverage its wealth channel, allowing for greater penetration into higher-fee products.
BMO Capital also considers Franklin Resources’ stock to be fundamentally undervalued. The stock trades at a lower multiple compared to its peers, presenting a compelling value opportunity. Additionally, the firm has experienced seven consecutive quarters of positive net flows, excluding WAMCO, and has seen encouraging momentum in various investment vehicles like ETFs, MFs, and SMAs. With strong secular tailwinds in the secondary market and successful fundraising efforts, BMO Capital believes that Franklin Resources is well-positioned for future growth, justifying their Buy rating.
In another report released on September 18, TD Cowen also reiterated a Buy rating on the stock with a $31.00 price target.