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

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Securities In This Article
Franklin Resources Inc
(BEN)

We’ve lowered our fair value estimate for narrow-moat-rated Franklin Resources BEN 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.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Greggory Warren

Strategist
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Greggory Warren, CFA, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers the traditional U.S.-and Canadian-based asset managers, as well as Berkshire Hathaway.

Before assuming his current role in 2017, Warren covered the financial-services sector as a senior analyst since late 2008. Prior to that time, he covered non-alcoholic beverage manufacturers and distributors, packaged food firms, food service distributors, and tobacco companies. Before joining Morningstar in 2005, Warren worked as a buy-side equity analyst for more than seven years, covering consumer staples and consumer cyclicals.

Warren holds a bachelor's degree in accounting and English from Augustana College. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Chicago. During 2014-19, Warren was selected to participate on the analyst panel at Berkshire Hathaway’s annual meeting, asking questions directly of Warren Buffett and Charlie Munger. The analyst panel was disbanded ahead of Berkshire’s 2020 annual meeting. Warren also ranked second in the investment services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

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