Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500

Franklin Resources, Inc.

Recommendation Price 12-Mo. Target Price Report Currency Investment Style
BUY « « « « « USD 27.26 (as of market close Mar 11, 2022) USD 36.00 USD Mid-Cap Value
Equity Analyst Catherine Seifert

GICS Sector Financials Summary Franklin Resources is one of the world's largest asset managers, serving retail, institutional,
Sub-Industry Asset Management and Custody Banks and high-net-worth clients.

Key Stock Statistics (Source: CFRA, S&P Global Market Intelligence (SPGMI), Company Reports)
52-Wk Range USD 38.27 - 26.48 Oper.EPS2022E USD 3.76 Market Capitalization[B] USD 13.67 Beta 1.19
Trailing 12-Month EPS USD 3.78 Oper.EPS2023E USD 3.85 Yield [%] 4.26 3-yr Proj. EPS CAGR[%] 2
Trailing 12-Month P/E 7.21 P/E on Oper.EPS2022E 7.25 Dividend Rate/Share USD 1.16 SPGMI's Quality Ranking B
USD 10K Invested 5 Yrs Ago 8,273.0 Common Shares Outstg.[M] 503.00 Trailing 12-Month Dividend USD 1.14 Institutional Ownership [%] 45.0

Price Performance Analyst's Risk Assessment

LOW MEDIUM HIGH

Our risk assessment reflects the company’s strong
operating margins, well-capitalized balance sheet, and
international exposure, offset by market volatility,
dependence on good relative investment performance for
asset growth, regulatory change risk, and secular
pressures arising from a shift in consumer preferences to
passive investments (like exchange traded funds, or ETFs).

Revenue/Earnings Data

Revenue (Million USD)

1Q 2Q 3Q 4Q Year
2022 2,224 -- -- -- --
2021 1,995 2,076 2,173 2,181 8,426
2020 1,389 1,311 1,161 1,705 5,566
2019 1,412 1,434 1,477 1,347 5,669
2018 1,616 1,618 1,559 1,527 6,204
2017 1,561 1,601 1,614 1,617 6,392
Source: CFRA, S&P Global Market Intelligence
Past performance is not an indication of future performance and should not be relied upon as such. Earnings Per Share (USD)
Analysis prepared by Catherine Seifert on Feb 07, 2022 11:19 PM ET, when the stock traded at USD 31.08. 1Q 2Q 3Q 4Q Year
2023 E 0.94 E 0.94 E 0.97 E 1.00 E 3.85
Highlights Investment Rationale/Risk
2022 0.88 E 0.85 E 0.90 E 0.93 E 3.76
u Following an acquisition-driven 51% rise in u We upgraded our opinion on the shares to Buy 2021 0.67 0.74 0.86 1.30 3.57
operating revenues in FY 21 (Sep.), we forecast from Hold after BEN posted very strong Dec-Q 2020 0.70 0.16 0.58 0.15 1.59
a 3% to 5% organic rise in FY 22 and a 4% to results, including 11% revenue growth and 2019 0.54 0.72 0.48 0.61 2.35
6% rise in FY 23. The revenue rise posted in FY asset inflows of $24.1B (versus year ago 2018 -1.06 0.79 0.75 0.96 1.39
21 reflects contributions from the acquisition of outflows of $4.5B). We think these results Fiscal Year ended Sep 30. EPS Estimates based on CFRA's
Legg Mason (LM). BEN acquired Legg Mason for provide the shares with a catalyst to close their Operating Earnings; historical GAAP earnings are as reported in
$6.5 billion in cash (including the assumption of valuation gap to peers. Although our view is Company reports.
$2 billion of LM debt) on July 31, 2020. The deal tempered by a more challenging macro
created a firm with a combined $1.4 trillion of environment, we view BEN’s ability to grow Dividend Data
AUM and some deal related synergies, offset by organically and enhance that growth with bolt-
Amount Date Ex-Div. Stk. of Payment
ongoing secular pressures (like the shift in on acquisitions as positive drivers for the
( USD) Decl. Date Record Date
investor preferences to passive investments). shares. BEN’s ability to maintain its higher-
After being adversely impacted by net asset than-peer margins is another positive driver for 0.2900 Feb 23 Mar 30 Mar 31 Apr 14 '22
outflows, which totaled $25.2 billion in FY 21, the shares. 0.2900 Dec 14 Dec 30 Dec 31 Jan 14 '22
versus $61.6 billion in FY 20 and $31.8 billion in 0.2800 Aug 24 Sep 29 Sep 30 Oct 15 '21
u Risks to our recommendation and target price
FY 19, Dec-Q inflows totaled $24.1 billion. 0.2800 Jun 08 Jun 29 Jun 30 Jul 15 '21
include potential depreciation in global equity
u Despite BEN’s fund flow challenges, the firm has and bond markets, and an accelerating retail Dividends have been paid since 1981 . Source: Company reports
maintained strong operating margins, thanks shift to passively-managed investments, which Past performance is not an indication of future performance
partly to cost controls. For FY 21, adjusted could result in net asset outflows. and should not be relied as such.
operating margins were 37.7%, below FY 20’s Forecasts are not a reliable indicator of future performance.
u Our 12-month target price of $36 assumes the
38.5%, but still above many peers. We expect Dividends paid in currencies other than the Trading currency have
shares will trade at 9.6x our FY 22 EPS estimate been accordingly converted for display purposes.
margins in FY 22 to improve modestly. Dec-Q of $3.76 and at 9.4x our FY 23 EPS estimate of
adjusted operating margins improved to 39.8%, $3.85. This compares with BEN’s one-year
from 37.2% a year earlier. average forward multiple of 9.3x and a peer
u We estimate EPS of $3.76 in FY 22 and $3.85 in average of 12.6x.
FY 23. Per share results will be aided by share
buybacks.

Redistribution or reproduction is prohibited without written permission. Copyright © 2022 CFRA. This document is not intended to provide personal investment advice and it does not take into account the specific investment
objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek independent financial advice regarding the suitability and/or appropriateness of making an investment
or implementing the investment strategies discussed in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such investments, if any,
may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested. Investors should seek advice concerning any impact this investment may have on
their personal tax position from their own tax advisor. Please note the publication date of this document. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless
otherwise indicated, there is no intention to update this document.
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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Business Summary Feb 07, 2022 Corporate information

CORPORATE OVERVIEW. Franklin Resources, Inc. (BEN) is one of the largest U.S. money managers, with Investor contact
approximately $1.58 trillion of assets under management at December 31, 2021, following the completion S. Oh (650-312-2000)
of its acquisition of rival asset manager Legg Mason, Inc. (LM) for $50 a share in cash. Total consideration
for the deal was about $6.5 billion, including the assumption of about $2 billion of LM debt. Combined, the Office
two firms have been propelled to the upper ranks of asset managers. The deal also shifts the assets under One Franklin Parkway, San Mateo, California, 94403
management (AUM) mix to one that is 48% fixed income, 33% equities, and 19% money market and other
assets. Telephone
650-312-2000
BEN’s sponsored investment products are distributed under five distinct names: Franklin, Templeton, Mutual
Series, Bissett, and Fiduciary. The Franklin family of funds is best known for its bond funds, although it Fax
includes a range of equity and balanced products. The Templeton family of funds is known for its global N/A
investment strategies and value style. Mutual Series funds are primarily known for their value-oriented
equity focus. The Bissett family of mutual funds operates in Canada and serves a broad range of clients, Website
primarily institutions. www.franklinresources.com
The majority of BEN’s revenue is generated by investment management and related services provided to its
retail and institutional mutual funds, and to its institutional, high-net-worth, and separately managed Officers
accounts. Investment management and related services include fund administration, shareholder services, Executive VP & General Executive Vice President
transfer agency, underwriting, distribution, custodial, trustee, and other fiduciary services. Investment Counsel of Technology &
management fees depend on the level of client assets under management, and the company earns higher C. S. Tyle Operations
revenues and income from equity assets, generally, and a shift in assets from equity to fixed income or A. Sethi
balanced funds reduces revenue. Underwriting and distribution fees consist of sales charges and Executive Chairman
commissions derived from sales of sponsored investment products and distribution fees. The company also G. E. Johnson Executive VP & CFO
generates fees from investment management services for high-net-worth individuals and families through M. Nicholls
Chief Accounting Officer
Fiduciary Trust. G. L. Shaneyfelt President, CEO & Director
CORPORATE STRATEGY. Despite its acquisitive history, we think BEN’s’ management favors organic growth. J. M. Johnson
We think that the interests of BEN’s management are closely aligned with those of shareholders, given that President, CEO & Director
directors, director nominees, and executive officers as a group own a relatively high level of common shares J. M. Johnson
compared to peers. We expect the company to be selective in any acquisition pursuits.
IMPACT OF MAJOR DEVELOPMENTS. In early February 2019, BEN completed its acquisition of Benefit Street Board Members
Partners, a private credit asset manager with $26 billion in AUM. The deal continues BEN’s selective A. J. Noto J. Y. Kim
acquisition strategy that included the purchase of two other asset managers (Edinburgh Partners and A. S. Friedman K. M. King
Random Forest) earlier in 2018.
E. E. Holiday L. D. Thompson
In November 2012, BEN took a majority position in a global fund of hedge funds, K2 Advisors Holdings. K2 is
based in Stamford, Connecticut, and had about $9 billion in assets under management. Approximately 115 F. W. LaHaye M. Byerwalter
employees work around the world in many locations that overlap with Franklin. Franklin bought its stake in G. E. Johnson R. H. Johnson
K2 from TA Associates, the private equity company that formed the publicly traded asset manager Affiliated G. Y. Yang S. H. Waugh
Managers Group (AMG). BEN has an agreement that it can purchase the remainder of K2 over a multi-year
period. J. M. Johnson S. L. Ginn

In April 2001, BEN acquired Fiduciary Trust Co. International, an investment management company catering J. W. Thiel
to high-net-worth and institutional clients, for $776 million. In 1996, BEN acquired certain assets and
liabilities of Heine Securities Corp., which managed the value-oriented Mutual Series funds. The Templeton Domicile Auditor
funds were acquired in 1992, with the purchase of Templeton, Galbraith & Hansberger. Delaware PricewaterhouseCoopers
CORPORATE GOVERNANCE. We think that BEN’s corporate governance practices are generally sound, but we LLP
think that improvements could be made. We consider executive compensation competitive, especially given Founded
what we see as generous compensation levels at certain competitors, and we view favorably the significant 1947
reduction in stock option grants in recent years. We also view positively that the full board of directors is Employees
elected annually and that the company does not have a “poison pill”. However, we would prefer to see 10,400
cumulative voting rights in director elections and a higher proportion of independent outside directors.
AUM MIX. Fixed income investments represented 45% of AUM at December 31, 2020, while equity Stockholders
investments accounted for 33%, multi-asset investments for 10%, alternative assets for 8%, and cash 2,645
management vehicles for the remaining 4%. As of December 31, 2020, 27% of AUM was invested outside of
the U.S. We think a decline in the dollar relative to other major currencies would aid BEN, due to the high
percentage of assets invested globally. Conversely, the company’s results would be challenged by a rising
U.S. dollar relative to major currencies.
FUND FLOW TRENDS. BEN reported $61.6 billion of long-term net outflows during FY 20, significantly worse
than the $31.8 billion in net outflows the firm experienced during FY 19, the $38 billion in net outflows
reported during FY 18, and the $38.6 billion in net outflows reported in FY 17. The FY 20 outflows reflected
$182.4 billion of sales that were offset by $244 billion of client redemptions and exchanges.
FINANCIAL TRENDS. During the five years ended September 30, 2020, AUM increased at a compound annual
rate of 13%, enhanced by the LM acquisition. During this same period, total revenues declined at a
compound annual rate of 6.9%, reflecting the downward pressure on fee structures.

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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Quantitative Evaluations Expanded Ratio Analysis

Fair Value Rank 1 2 3 4 5 2021 2020 2019 2018

Lowest Highest Price/Sales 1.73 1.80 2.57 2.64
Based on CFRA's proprietary quantitative model, Price/Tangible Book Value 7.26 14.40 2.08 2.09
stocks are ranked from most overvalued (1) to most Price/Pretax Income 5.97 9.84 8.83 7.39
undervalued (5). P/E Ratio 8.32 12.80 12.28 21.88
% LT Debt to Capitalization 22.74 24.17 5.77 5.82
Fair Value USD Analysis of the stock’s current worth, based on CFRA’s Avg. Diluted Shares Outstg. (M) 490.60 492.40 504.30 538.00
Calculation 28.03 proprietary quantitative model suggests that BEN is
undervalued by USD 0.77 or 2.82% Figures based on fiscal year-end price

Volatility LOW AVERAGE HIGH

Key Growth Rates and Averages
Technical NEUTRAL Since January, 2022, the technical indicators for BEN
Past Growth Rate (%) 1 Year 3 Years 5 Years
Evaluation have been NEUTRAL"
Net Income 129.22 33.80 1.18
Insider Activity UNFAVORABLE NEUTRAL FAVORABLE
Ratio Analysis (Annual Avg.)
Return on Equity (%) 17.34 11.64 10.73
Return on Assets (%) 5.65 5.83 6.80

Company Financials Fiscal year ending Sep 30

Per Share Data (USD) 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Tangible Book Value 4.10 1.41 13.84 14.57 18.73 17.05 15.88 14.86 12.23 11.09
Free Cash Flow 2.38 1.99 0.07 3.95 1.90 2.79 3.55 3.34 3.12 1.54
Earnings 3.57 1.59 2.35 1.39 3.01 2.94 3.29 3.79 3.37 2.98
Earnings (Normalized) 2.75 1.84 2.23 2.68 2.54 2.60 2.96 3.26 2.85 2.58
Dividends 1.12 1.08 1.04 0.92 0.80 0.72 0.60 0.48 0.39 0.36
Payout Ratio (%) 31.00 67.00 43.00 65.00 26.00 24.00 18.00 12.00 9.00 9.00
Prices: High 35.94 29.27 35.82 45.96 47.65 42.23 59.43 58.87 56.54 42.73
Prices: Low 17.97 14.91 25.57 29.95 33.02 30.56 36.15 49.49 41.34 29.24
P/E Ratio: High 10.10 18.40 15.20 33.10 15.80 14.40 18.10 15.50 16.80 14.30
P/E Ratio: Low 5.00 9.40 10.90 21.60 11.00 10.40 11.00 13.10 12.30 9.80

Income Statement Analysis (Million USD)

Net Interest Income N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Revenue 8,426 5,566 5,669 6,204 6,392 6,618 7,949 8,491 7,985 7,101
Interest Expense N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Loan Loss Provision N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
% Expense/Operating Revenue 75.40 74.60 71.60 66.70 64.40 63.80 61.80 62.10 63.40 64.60
Pretax Income 2,444 1,018 1,648 2,215 2,549 2,500 3,028 3,410 3,027 2,678
Effective Tax Rate (%) 14.30 22.70 26.80 66.50 29.80 29.70 30.50 29.30 28.30 28.50
Net Income 1,831 799.00 1,196 764.00 1,697 1,727 2,035 2,384 2,150 1,931
Net Income (Normalized) 1,350 904.00 1,125 1,441 1,418 1,515 1,822 2,041 1,809 1,660

Balance Sheet and Other Financial Data (Million USD)

Total Assets 24,168 21,685 14,532 14,384 17,534 16,099 16,336 16,357 15,390 14,752
% Return on Assets 5.65 4.87 6.95 8.08 8.45 9.23 11.61 12.68 12.11 11.02
% Return on Equity 17.30 6.90 10.70 5.70 13.00 14.00 16.80 20.70 21.10 20.30
% Return on Common Equity 16.40 7.80 12.00 6.60 13.70 14.40 17.30 21.90 22.20 21.70
% Return on Capital 8.17 6.51 8.37 9.25 9.50 10.73 13.77 15.70 15.63 14.64

Source: S&P Global Market Intelligence. Data may be preliminary or restated; before results of discontinued operations/special items. Per share data adjusted for stock dividends; EPS diluted.
E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.

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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Sub-Industry Outlook Industry Performance

We have a neutral fundamental outlook for the
asset management and custody banks sub-
industry. We think the long-term outlook is
relatively healthy due to aging populations and a
fairly broad-based global economic recovery
expected in the aftermath of the Covid-19 induced
recession, despite the potential for some near-
term volatility as Covid-19 variants emerge.
Demographic trends are also favorable, as
millennials come of age and baby boomers play
“catch-up” with contributions to IRAs, driving a
significant increase in retirement investments, in
our view. Millennials are also maturing and
beginning to save for retirement. We see upside
potential for asset managers with solid
reputations, better-than-average fund
performance, and strong management. Many of
the companies in this sub-industry will also
benefit from recently enacted legislative initiatives
designed to encourage saving for retirement.
These positive longer-term factors are offset by
some structural and secular changes within the
industry, including a shift in investor preferences
to ETFs and away from actively managed assets.
Near-term market volatility will also impact many
equity funds. Within this relatively broad-based
sub-industry classification are companies
engaged in asset management, trust and
processing, and private equity activities. Each of
these different entities’ business models are
influenced to varying degrees by changes in
interest rates and by an array of industry-specific
competitive dynamics. Within the asset
management industry, there are some negative
factors pressuring many firms. An ongoing shift
out of active equity investments and into passive
and fixed income investments has exerted
downward pressure on fee revenues for most
firms.
recovery of most asset values. However, fund GICS Sector: Financials
flow trends varied by firm, with actively Sub-Industry: Asset Management and Custody Banks
managed equity funds seeing the most Based on S&P 1500 Indexes
dramatic outflows. Our 2022 projection is for Five-Year market price performance through Mar 12, 2022
high-single-digit AUM growth, though near-
term market volatility amid shifting sector
allocations will likely keep AUM levels under
pressure. A negative trend that continues to
linger is AUM growth that does not directly
translate to a similar rate of revenue growth
due to increasing amounts of AUM flowing into
lower revenue-producing, passively-managed
assets.
Fund flow trends in 2020 reflected an
acceleration of the ongoing shift out of active
equity investments and into passive, fixed
income, and money market investments. Long-
term funds had net inflows of $212.4 billion in
2020, amid taxable fixed income inflows of
$441.4 billion, sector equity inflows of $56.3
billion, and municipal fixed income inflows of
$55.4 billion, offset by U.S. equity outflows of
$241.2 billion and international equity outflows
of $63.2 billion. Money market inflows were
$678.2 billion in 2020. Within these
aggregates, mutual funds had $289 billion of
net outflows, while ETFs has $502 billion of net
inflows.
A rebound in asset values amid an economic
recovery propelled the S&P Asset Management
& Custody Banks Index up by 29.1% year to
date through November 30, 2021, versus a
21.3% rise in the S&P 1500 Index. During NOTE: A sector chart appears when the sub-industry does not have
sufficient historical index data.
2020, the sub-industry index was up 12.8%,
All Sector & Sub-Industry information is based on the Global Industry
versus a 15.8% rise in the S&P 1500 Index.
Classification Standard (GICS).
/ Catherine Seifert Past performance is not an indication of future performance and should
not be relied upon as such.
Source: CFRA, S&P Global Market Intelligence

Growth in assets under management is a key

driver for many firms in this industry. However, it’s
important to differentiate between asset growth
due to positive fund flow trends and asset growth
due to market appreciation. AUM levels for most
firms increased year to date in 2021 amid a

Sub-Industry: Asset Management and Custody Banks Peer Group*: Asset Management and Custody Banks
Recent 30-Day 1-Year Fair Return
Stock Stock Stk. Mkt. Price Price P/E Value Yield on Equity LTD to
Peer Group Symbol Exchange Currency Price Cap. (M) Chg. (%) Chg. (%) Ratio Calc. (%) (%) Cap (%)

Franklin Resources, Inc. BEN NYSE USD 27.23 13,673.0 -12.0 -4.9 7.0 28.03 4.3 17.8 22.8
Amundi AMDU.F OTCPK USD 65.38 13,211.0 N/A -21.6 9.0 N/A N/A N/A N/A
Ares Capital Corporation ARCC NasdaqGS USD 20.49 9,812.0 -9.3 7.4 6.0 N/A 8.2 19.5 55.5
Ares Management Corporation ARES NYSE USD 71.37 12,465.0 -9.0 33.0 33.0 N/A 3.4 24.5 71.1
China Cinda Asset Management Co., Ltd. CCGD.F OTCPK USD 0.16 7,732.0 N/A -20.4 5.0 N/A N/A 5.7 29.5
IGM Financial Inc. IGIF.F OTCPK USD 35.24 8,442.0 -1.7 17.3 11.0 N/A 5.0 17.0 25.8
Invesco Ltd. IVZ NYSE USD 20.06 9,243.0 -13.1 -20.4 7.0 20.10 3.4 12.4 12.1
Onex Corporation ONEX.F OTCPK USD 66.63 7,407.0 -8.1 7.2 4.0 N/A 0.5 18.0 0.7
SEI Investments Company SEIC NasdaqGS USD 56.39 7,802.0 -7.2 -5.7 15.0 N/A 1.4 30.4 3.5
The Carlyle Group Inc. CG NasdaqGS USD 42.74 15,229.0 -13.6 17.6 5.0 54.44 2.3 70.5 59.4
VNV Global AB (publ) VSTK.F OTCPK USD 8.50 9,270.0 N/A -35.6 14.0 N/A N/A 5.1 3.6

*For Peer Groups with more than 10 companies or stocks, selection of issues is based on market capitalization.
NA-Not Available; NM-Not Meaningful.
Note: Peers are selected based on Global Industry Classification Standards and market capitalization. The peer group list includes companies with similar characteristics, but may not include all the companies within the same
industry and/or that engage in the same line of business.

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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Analyst Research Notes and other Company News
February 01, 2022
01:58 PM ET... CFRA Lifts Opinion on Shares of Franklin Resources, Inc. to Buy from
Hold (BEN 31.80****):
We trim our 12-month target price by $2 to $36, or 9.6x our FY 22 (Sep.) operating
EPS estimate of $3.76 (raised by $0.16) and 9.4x our FY 23 EPS estimate of $3.85
(upped by $0.10) versus the shares’ three-year average forward multiple of 10x and
the peer average of 12.6x. BEN posted Dec-Q operating EPS of $1.08 versus $0.73,
topping our $0.88 EPS estimate and the $0.89 consensus forecast, on 11% revenue
growth (versus our 3% to 5% growth forecast) and a 460 basis point rise in
operating margins ( to 25.1%). We applaud these results and believe the shift in
BEN’s growth trajectory -- driven by $24.1B of net asset inflows across all asset
classes versus $4.5B of net outflows a year ago -- will provide the shares (which
currently yield 3.6%) with a catalyst to close their valuation gap to peers. Although
our view is tempered by a more challenging macro environment, we view BEN’s
ability to grow AUM organically and enhance that growth with bolt-on acquisitions
as positive drivers for the shares. / Catherine Seifert
November 08, 2021
01:36 PM ET... CFRA Keeps Hold Opinion on Shares of Franklin Resources, Inc. (BEN
35.95***):
We lift our 12-month target price by $5 to $38, or 10.1x our FY 23 (Sep.) operating
EPS estimate of $3.75 (raised by $0.15) and 10.6x our FY 22 EPS estimate of $3.60
(upped by $0.15), versus BEN’s three year average forward multiple of 10.1x, a peer
average of 15.7x. BEN reported Sep-Q operating EPS of $1.26 versus $0.56, topping
our $0.82 EPS estimate and the $0.86 consensus forecast on an acquisition-driven
28% rise in revenues, a 430 basis point widening of adjusted operating margins (to
39%) and a $0.30 a share tax credit in the current quarter. We applaud these results
and expect growth in FY 2022 to be aided by additional “bolt on” acquisitions, like
the two just announced. But, our view remains tempered by BEN’s persistent asset
outflows, including the $9.9B in the current quarter and $25.2B in FY 21. Weighing
net outflows with strategic acquisitions and a below-peer valuation, we think the
shares (currently yielding 3.1%) are fairly valued, given the lack of organic growth,
but worth holding. / Catherine Seifert
August 04, 2021
04:28 PM ET... CFRA Keeps Hold Recommendation on Shares of Franklin Resources,
Inc. (BEN 30.70***):
We cut our 12-month target price by $2, to $33, or 9.2x our FY 23 (Sep.) EPS
estimate of $3.60 and 9.6x our FY 22 EPS estimate of $3.45 (raised by $0.20),
versus the shares’ one year average forward multiple of 8.7x and a peer average of
16.5x (that includes faster growing firms with organic growth). We raise our FY 21
EPS estimate by $0.18, to $3.30, after BEN reported Jun-Q EPS of $0.98 versus
$0.70, above our EPS estimate and the consensus forecast of $0.78 on an
acquisition-driven 87% urge in revenues. We note Jun-Q sequential revenue growth
was 5%. We keep our 2021 revenue forecast of over 20%, and see growth of 3% to
5% in 2022. We applaud the 7/31/20 acquisition of Legg Mason, which propelled
BEN’s assets under management to $1.55T at June 30, 2021, but did not address
the secular pressures facing both firms, as evidenced by the $8.8B in Jun-Q net
outflows ($26.5B YTD). Though down from year -ago outflows of $11.6B ($47.8B),
we believe BEN’s net outflows remove a catalyst from the shares. / Catherine Seifert
May 04, 2021
02:10 PM ET... CFRA Keeps Hold Opinion on Shares of Franklin Resources, Inc. (BEN
32.24***):
We raise our 12-month target price by $7 to $35, or 11.2x our FY 21 (Sep.) EPS
estimate of $3.12 (upped by $0.20) and 10.8x our FY 22 EPS estimate of $3.25
(lifted by $0.25), above the shares’ one year average forward p/e multiple of 8.8x (on
improved metrics) and closer to the peer average of 12x. Mar-Q EPS of $0.79 versus
$0.66 topped our $0.67 EPS estimate, the $0.75 consensus forecast on an
acquisition driven 58% rise in revenues, offset by a 520 basis point contraction in
adjusted operating margins (to 38%). Assets under management doubled, year to
year, to just under $1.5T, but BEN still suffered net outflows of$4.5B in Q1, down
from $25.4B a year ago. We applaud the reduced level of outflows, and think BEN’s
expanded distribution platform will aid long term fund flow trends. Currently trading
at 10.3x our 2021 EPS estimate, we view the shares as fairly valued versus their
three year average forward multiple of 10.3x, but worth holding given merger
integration progress and the current yield of 3.5% . / Catherine Seifert
Note: Research notes reflect CFRA's published opinions and analysis on the stock at the time the note was published. The note reflects the views of the equity analyst as of
the date and time indicated in the note, and may not reflect CFRA's current view on the company.
Redistribution or reproduction is prohibited without prior written permission. Copyright © 2022 CFRA.
February 02, 2021
11:34 AM ET... CFRA Keeps Hold Opinion on Shares of Franklin Resources, Inc. (BEN
25.50***):
We keep our 12-month target price of $28, or 9.6x our FY 2021 (Sep.) operating
EPS estimate of $2.92 (raised by $0.02) and 9.3x our FY 2022 operating EPS
estimate of $3.00 versus the shares’ one-year average forward multiple of 8.8x and
a peer average of 14.2x (which incudes faster growing more profitable firms). BEN
reported Dec-Q operating EPS of $0.73 versus $0.67 on an acquisition-driven 44%
rise in revenues, offset by a contraction in operation margins (to 20.5% from 26.8%)
amid a 56% rise in operating expenses. Assets under management also more than
doubled, to nearly $1.5 trillion at December 31, 2020. However, BEN is still plagued
with net asset outflows that totaled $14.7 billion in the Dec-Q, up 30% from a year
ago. We acknowledge BEN’s discounted valuation to peers, but given the contraction
in already below-peer operating margins and the asset outflow trends, we think the
shares are fairly valued, but worth holding given their current yield of 4.4%. /
Catherine Seifert
February 01, 2021
11:16 AM ET... CFRA Keeps Hold Opinion on Shares of Franklin Resources, Inc. (BEN
25.88***):
We lift our 12-month target price by $5, to $28, or 9.7x our FY 2021 (Sep.) EPS
estimate of $2.90 and 9.3x our FY 2022 (Sep.) EPS estimate of $3.00, versus BEN’s
one year average forward multiple of 8.8x and a peer average of 14.2x. We expect
BEN to produce revenue growth of 20% in FY 2021, reflecting contributions from the
Legg Mason (LM) acquisition. BEN acquired LM for $6.5 billion in cash (and the
assumption of $2 billion of LM debt) on July 31, 2020, creating a firm with a
combined $1.4 trillion of AUM and some deal related synergies, offset by ongoing
secular pressures (like the shift in investor preferences to passive investments) that
we do not see this deal addressing. BEN continues to be impacted by net asset
outflows, which nearly doubled in FY 20, to $61.6 billion, from $31.8 billion in FY 19.
Against that backdrop, we view the shares, currently trading at 8.9x our FY 2021
EPS estimate, as fairly valued versus historical averages, but worth holding, given
deal synergies and the 4.3% current yield. / Catherine Seifert
October 27, 2020
10:09 AM ET... CFRA Keeps, Inc. Hold Opinion on Shares of Franklin Resources, Inc.
(BEN 22.84***):
We raise our 12 month target price by $1, to $23, or 7.9x our FY 2021 (Sep.)
operating EPS estimate of $2.90 (raised today by $0.40 to reflect contributions from
the Legg Mason acquisition) and 7.7x our newly initiated FY 2022 (Sep.) operating
EPS estimate of $3.00, below BEN’s three year average forward multiple of 11x and
the peer average of 15.4x, reflecting ongoing and persistent fund outflows, including
$61.6B in FY 2020, which were nearly double the $31.8B of outflows in FY 2019. BEN
reported Sep-Q operating EPS of $0.56 versus $0.71, as an acquisition driven 20%
rise in revenues was offset by operating margin contraction (34.7% versus 42.1%).
FY 2020 operating revenues declined 2%, less than our 4%-6% forecasted decline.
We forecast FY 2021 revenues to rise by 15% on the acquisition, but to decline by
4%-6% in FY 2022 on fund outflows. We acknowledge BEN’s discounted valuation
and current yield of 4.7%, but BEN’s above-peer level of fund outflows remove a
catalyst from the shares, in our view. / Catherine Seifert
5
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Franklin Resources, Inc.
Analysts Recommendations Wall Street Consensus Opinion

Hold

Wall Street Consensus vs. Performance

For fiscal year 2022, analysts estimate that BEN will earn
USD 3.74. For fiscal year 2023, analysts estimate that
BEN's earnings per share will grow by 1.75% to USD 3.80.

No. of
Recommendations % of Total 1 Mo.Prior 3 Mos.Prior
Buy 1 8 1 1
Buy/Hold 1 8 1 1
Hold 7 58 7 7
Weak hold 0 0 0 0
Sell 2 17 2 2
No Opinion 1 8 1 1
Total 12 100 12 12

Wall Street Consensus Estimates

Fiscal Year Avg Est. High Est. Low Est. # of Est. Est. P/E
2023 3.80 4.01 3.65 11 7.16
2022 3.74 3.87 3.59 12 7.29
2023 vs. 2022 p 2% p 4% p 2% q -8% q -2%

Q2'23 0.91 0.95 0.89 3 29.97

Q2'22 0.85 0.95 0.70 10 31.97
Q2'23 vs. Q2'22 p 7% q -0% p 27% q -70% q -6%
Forecasts are not reliable indicator of future performance.
Note: A company's earnings outlook plays a major part in any investment decision. S&P Global Market Intelligence organizes the earnings estimates of over 2,300 Wall Street analysts, and
provides their consensus of earnings over the next two years, as well as how those earnings estimates have changed over time. Note that the information provided in relation to consensus
estimates is not intended to predict actual results and should not be taken as a reliable indicator of future performance.
Note: For all tables, graphs and charts in this report that do not cite any reference or source, the source is S&P Global Market Intelligence.

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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Glossary

STARS Abbreviations Used in Equity Research Reports

Since January 1, 1987, CFRA Equity and Fund Research Services, and its CAGR - Compound Annual Growth Rate
predecessor S&P Capital IQ Equity Research has ranked a universe of U.S. CAPEX - Capital Expenditures
common stocks, ADRs (American Depositary Receipts), and ADSs (American CY - Calendar Year
Depositary Shares) based on a given equity's potential for future performance. DCF - Discounted Cash Flow
Similarly, we have ranked Asian and European equities since June 30, 2002. DDM - Dividend Discount Model
Under proprietary STARS (Stock Appreciation Ranking System), equity analysts EBIT - Earnings Before Interest and Taxes
rank equities according to their individual forecast of an equity's future total EBITDA - Earnings Before Interest, Taxes, Depreciation & Amortization
return potential versus the expected total return of a relevant benchmark (e.g., EPS - Earnings Per Share
a regional index (MSCI AC Asia Pacific Index, MSCI AC Europe Index or S&P 500® EV - Enterprise Value
Index)), based on a 12-month time horizon. STARS was designed to help FCF - Free Cash Flow
investors looking to put their investment decisions in perspective. Data used to FFO - Funds From Operations
assist in determining the STARS ranking may be the result of the analyst's own FY - Fiscal Year
models as well as internal proprietary models resulting from dynamic data P/E - Price/Earnings
inputs. P/NAV - Price to Net Asset Value
PEG Ratio - P/E-to-Growth Ratio
S&P Global Market Intelligence's Quality Ranking PV - Present Value
(also known as S&P Capital IQ Earnings & Dividend Rankings) - Growth and R&D - Research & Development
S&P Capital IQ Earnings & Dividend Rankings stability of earnings and dividends ROCE - Return on Capital Employed
are deemed key elements in establishing S&P Global Market Intelligence's ROE Return on Equity
earnings and dividend rankings for common stocks, which are designed to ROI - Return on Investment
capsulize the nature of this record in a single symbol. It should be noted, ROIC - Return on Invested Capital
however, that the process also takes into consideration certain adjustments ROA - Return on Assets
and modifications deemed desirable in establishing such rankings. The final SG&A - Selling, General & Administrative Expenses
score for each stock is measured against a scoring matrix determined by SOTP - Sum-of-The-Parts
analysis of the scores of a large and representative sample of stocks. The range WACC - Weighted Average Cost of Capital
of scores in the array of this sample has been aligned with the following ladder
of rankings: Dividends on American Depository Receipts (ADRs) and American Depository
Shares (ADSs) are net of taxes (paid in the country of origin).
A+ Highest B Below Average
Qualitative Risk Assessment
A High B- Lower
A Above C Lowest
Reflects an equity analyst's view of a given company's operational risk, or the
risk of a firm's ability to continue as an ongoing concern. The Qualitative Risk
B+ Average D In Reorganization
Assessment is a relative ranking to the U.S. STARS universe, and should be
NC Not Ranked reflective of risk factors related to a company's operations, as opposed to risk
and volatility measures associated with share prices. For an ETF this reflects on
EPS Estimates a capitalization-weighted basis, the average qualitative risk assessment
CFRA's earnings per share (EPS) estimates reflect analyst projections of future assigned to holdings of the fund.
EPS from continuing operations, and generally exclude various items that are
viewed as special, non-recurring, or extraordinary. Also, EPS estimates reflect STARS Ranking system and definition:
either forecasts of equity analysts; or, the consensus (average) EPS estimate, ««««« 5-STARS (Strong Buy):
which are independently compiled by S&P Global Market Intelligence, a data Total return is expected to outperform the total return of a relevant benchmark,
provider to CFRA. Among the items typically excluded from EPS estimates are by a notable margin over the coming 12 months, with shares rising in price on
asset sale gains; impairment, restructuring or merger-related charges; legal an absolute basis.
and insurance settlements; in process research and development expenses; ««««« 4-STARS (Buy):
gains or losses on the extinguishment of debt; the cumulative effect of Total return is expected to outperform the total return of a relevant benchmark
accounting changes; and earnings related to operations that have been over the coming 12 months.
classified by the company as discontinued. The inclusion of some items, such
as stock option expense and recurring types of other charges, may vary, and ««««« 3-STARS (Hold):
depend on such factors as industry practice, analyst judgment, and the extent Total return is expected to closely approximate the total return of a relevant
to which some types of data is disclosed by companies. benchmark over the coming 12 months.
««««« 2-STARS (Sell):
12-Month Target Price Total return is expected to underperform the total return of a relevant
The equity analyst's projection of the market price a given security will benchmark over the coming 12 months.
command 12 months hence, based on a combination of intrinsic, relative, and
««««« 1-STAR (Strong Sell):
private market valuation metrics, including Fair Value.
Total return is expected to underperform the total return of a relevant
benchmark by a notable margin over the coming 12 months, with shares falling
in price on an absolute basis.
Relevant benchmarks:
In North America, the relevant benchmark is the S&P 500 Index, in Europe and
in Asia, the relevant benchmarks are the MSCI AC Europe Index and the MSCI AC
Asia Pacific Index, respectively.

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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
Disclosures

Stocks are ranked in accordance with the following ranking methodologies:
STARS Stock Reports:
Qualitative STARS rankings are determined and assigned by equity analysts. For reports
containing STARS rankings refer to the Glossary section of the report for detailed
methodology and the definition of STARS rankings.
Quantitative Stock Reports:
Quantitative rankings are determined by ranking a universe of common stocks based on 5
measures or model categories: Valuation, Quality, Growth, Street Sentiment, and Price
Momentum. In the U.S., a sixth sub-category for Financial Health will also be displayed.
Percentile scores are used to compare each company to all other companies in the same
universe for each model category. The five (six) model category scores are then weighted
and rolled up into a single percentile ranking for that company. For reports containing
quantitative rankings refer to the Glossary section seof the report for detailed methodology
and the definition of Quantitative rankings.
STARS Stock Reports and Quantitative Stock Reports:
The methodologies used in STARS Stock Reports and Quantitative Stock Reports
(collectively, the "Research Reports") reflect different criteria, assumptions and analytical
methods and may have differing rankings. The methodologies and data used to generate
the different types of Research Reports are believed by the author and distributor
reasonable and appropriate. Generally, CFRA does not generate reports with different
ranking methodologies for the same issuer. However, in the event that different
methodologies or data are used on the analysis of an issuer, the methodologies may lead
to different views on the issuer, which may at times result in contradicting assessments of
an issuer. CFRA reserves the right to alter, replace or vary models, methodologies or
assumptions from time to time and without notice to clients.
STARS Stock Reports:
Global STARS Distribution as of February 08, 2022
Ranking North America Europe Asia Global
Buy 43.8% 46.2% 40.0% 43.4%
Hold 50.0% 47.4% 55.7% 50.7%
Sell 6.2% 6.4% 4.3% 5.9%
Total 100.0% 100.0% 100.0% 100.0%
Analyst Certification:
STARS Stock Reports are prepared by the equity research analysts of CFRA and its
affiliates and subsidiaries. Quantitative Stock Reports are prepared by CFRA. All of the
views expressed in STARS Stock Reports accurately reflect the research analyst's
personal views regarding any and all of the subject securities or issuers; all of the views
expressed in the Quantitative Stock Reports accurately reflect the output of CFRA's
algorithms and programs. Analysts generally update STARS Stock Reports at least four
times each year. Quantitative Stock Reports are generally updated weekly. No part of
analysts’ or CFRA’s compensation was, is, or will be directly or indirectly related to the
specific rankings or views expressed in any Stock Report.
About CFRA Equity Research:
This Research Report is published and originally distributed by Accounting Research &
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is published and originally distributed by CFRA UK Limited ("CFRA UK"), which is regulated
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Stock Report | March 12, 2022 | NYSE Symbol: BEN | BEN is in the S&P 500
Franklin Resources, Inc.
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