Franklin Resources: Ongoing Equity and Credit Market Volatility Pose Headwinds for AUM Growth

We've lowered our fair value estimate for narrow-moat-rated Franklin Resources to $26 per share from $28 after updating our valuation model to account for weaker equity and credit market returns in the near term, which will have a negative impact on assets under management. Our new fair value estimate implies a price/earnings multiple of 11.1 times our fiscal 2023 earnings estimate and 10.1 times our fiscal 2024 earnings estimate. For some perspective, during the past five (10) years, the company's shares have traded at an average of 10.6 (13.2) times trailing earnings.