Business Description
Franklin Resources, Inc. is a publicly traded holding company specializing in investment management. Operating through its various subsidiaries, the firm provides a comprehensive range of financial services to a diverse clientele, including individual investors, institutions, pension funds, trusts, and partnerships. It designs and offers a suite of mutual funds, spanning strategies in equity, fixed income, balanced portfolios, and multi-asset classes. The company actively allocates capital across public stock markets, bond markets, and alternative investment opportunities. Founded in 1947, Franklin Resources is headquartered in San Mateo, California, with an additional operational center located in Hyderabad, India.
Business History
Generated: Jun 17, 2026 3:02amPrice Overview
Last updated: Jun 17, 2026 3:00am (10d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 0.91
Total Equity: $12.08B
Shares: 515,400,000
Total Debt: $12.30B
Cash: $3.57B
EBITDA: $1.41B
Total Debt: $12.30B
Cash: $3.57B
Revenue: $8.77B
Revenue: $8.77B
Revenue: $8.77B
Total Equity: $12.08B
Tax Rate: 30.2%
Equity: $12.08B
Total Debt: $12.30B
Cash: $3.57B
Current Liabilities: $1.89B
Long-Term Debt: $12.30B
Total Debt: $12.30B
Total Equity: $12.08B
Shares: 515,400,000
Shares: 515,400,000
CapEx: -$154.50M
Shares: 515,400,000
Stock Price: $33.18
Net Income: $524.90M
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
Franklin Resources still throws off real cash — $911.6M FCF in 2025 on $8.77B revenue, OCF/NI of 1.51x, and clean accruals (-0.8% of assets, Beneish M -2.53). Gross margins remain elite-asset-manager-typical at ~80%. But operating margin has collapsed from 22.3% in 2021 to 6.9% in 2025, and net income has more than halved from $1.83B to $525M over the same period despite revenue being roughly flat. That is the signature of a mature, fee-pressured active manager where costs (likely Western Asset / Putnam integration drag, comp, intangible amortization) are outrunning a stagnant top line.
The balance sheet is the second concern. Net debt of -$8.73B against $3.57B liquid cash, and an Altman Z of 1.52 in the distress zone — caveated because Z is calibrated for industrials, but it still signals leverage is non-trivial for an asset manager exposed to AUM volatility. Dilution is contained (1.2% diluted share CAGR, buybacks at 113% of SBC), which is a genuine positive. Insider activity is essentially all routine awards and a Jennifer Johnson gift — no real open-market P buys despite the module's framing; the $2.1M of "buying" appears to be director stock-grant value, not conviction purchases.
Net: this is a legitimate cash earner with brand and scale, but profitability is trending the wrong way and the business is not visibly compounding per-share value. Solid franchise, deteriorating economics.
Verify before trusting this (6)
- Western Asset / Putnam integration: how much of the OpM compression is one-time amortization/restructuring vs. structural fee erosion
- Net flows by asset class (active equity vs. fixed income vs. alts) — is AUM growth from markets or actual inflows?
- Debt maturity ladder and covenants given Altman Z distress reading
- Western Asset litigation/outflow exposure following the Macro Opportunities issues
- Mix shift toward Alternatives (Lexington, Benefit Street) — fee rate and margin contribution
- Whether the dividend payout ratio remains covered if FCF compresses further
The e2e composite and signal-adjusted fair values both land at $33.21 versus a $33.18 quote — a ~0.1% gap. That is as close to dead-on as valuation gets, and it lines up with the steady-compounder narrative: a $1.4T AUM legacy manager throwing off cash and a dividend, with no growth premium and no distressed discount. Earnings quality is clean, so no haircut is warranted on that axis.
The Company-Quality lens, however, flags real margin erosion (operating margin 22% → 7% over four years) and a balance sheet that's a constraint. That argues the deserved multiple should be modestly BELOW a healthy peer's, not above it — and the current price already reflects that (BEN trades at a discount to higher-quality peers like TROW/BLK on most fee-earner metrics). The bull case of 'fair value + yield' is intact; the bear case of continued fee/AUM compression is the risk that would push deserved value lower over time, not a reason it's mispriced today.
Net: no margin of safety, no obvious overvaluation. This is a yield-and-buyback story trading at intrinsic. To get interested on valuation alone I'd want a meaningful discount — high-single-digit to low-double-digit — to compensate for the margin trajectory.
Verify before trusting this (5)
- Quarterly net flows by asset class — are active outflows accelerating or stabilizing?
- Fee rate (bps on AUM) trend — the key driver of whether FV $33 holds or drifts to $28
- Operating margin path — any signs the 7% is a trough vs continuing lower
- Debt maturity schedule and interest expense run-rate given balance sheet is flagged as a constraint
- Dividend coverage from FCF and management commentary on buyback pace
BEN sits in a sentiment dead zone: a steady-compounder archetype with minimal narrative intensity, meaning there is no story bid lifting the stock and no cult to absorb selling pressure. The active market narrative around asset managers is fee compression and passive displacement - a slow-bleed bear story that is durable and well-known, leaving BEN reliant on dividend yield buyers rather than momentum or thematic flows. With price already at DCF fair value, the narrative is doing zero premium work, so any sentiment shift skews asymmetrically negative. The tape itself is neutral but tilted risk-off relative to recent calm (VIX in the 56th percentile, S&P off highs), and BEN's 1.59 beta means even modest market drawdowns get amplified into this name despite its defensive cash-flow profile. Analyst tone confirms the chill: consensus Hold, target $32 BELOW the $34 print, and the lone recent revision held that bearish $32 line - a quiet but real headwind. Higher-for-longer rates at 4.43% on the 10y compound the pressure on a financial whose earnings track AUM and market levels.
Verify before trusting this (4)
- Whether equity markets break decisively below recent range (would amplify AUM-linked pressure)
- Any sell-side upgrade or PT raise that would crack the Hold/below-spot consensus
- Net flows data and any active-to-passive headline that re-energizes the bear narrative
- A credible alts or private-markets story from management that could shift archetype
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 17, 2026 3:03am (10d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $8.4B | $8.3B | $7.8B | $8.5B | $8.8B |
| Cost of Revenue | $1.4B | $1.4B | $1.5B | $1.7B | $1.7B |
| Gross Profit | $7.0B | $6.8B | $6.3B | $6.8B | $7.0B |
| Operating Expenses | $5.1B | $5.1B | $5.2B | $6.4B | $6.4B |
| Operating Income | $1.9B | $1.8B | $1.1B | $407.6M | $604.1M |
| Net Income | $1.8B | $1.3B | $882.8M | $464.8M | $524.9M |
| EBITDA | $2.8B | $2.2B | $1.9B | $1.4B | $1.4B |
| EPS | $3.58 | $2.53 | $1.72 | $0.85 | $0.91 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 17, 2026 3:02am (10d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $4.6B | $4.8B | $4.4B | $4.4B | $3.6B |
| Total Current Assets | $6.1B | $6.0B | $5.8B | $5.9B | $5.1B |
| Total Assets | $24.2B | $28.1B | $30.1B | $32.5B | $32.4B |
| Current Liabilities | $1.7B | $1.6B | $1.4B | $1.8B | $1.9B |
| Long-Term Debt | $7.1B | $8.8B | $11.3B | $12.1B | $12.3B |
| Total Liabilities | $11.4B | $14.2B | $16.5B | $17.9B | $18.2B |
| Total Equity | $11.2B | $11.5B | $11.9B | $12.5B | $12.1B |
| Retained Earnings | $11.6B | $12.0B | $12.4B | $11.9B | $11.5B |
Cash Flow (Annual)
Last updated: Jun 17, 2026 3:02am (10d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.2B | $2.0B | $1.1B | $971.3M | $1.1B |
| Capital Expenditure | -$79.3M | -$90.3M | -$148.8M | -$177.1M | -$154.5M |
| Free Cash Flow | $1.2B | $1.9B | $940.4M | $794.2M | $911.6M |
| Acquisitions (net) | -$9.0M | -$1.4B | -$500.5M | $175.1M | $0 |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$208.2M | -$180.8M | -$256.3M | -$274.4M | -$240.3M |
| Net Change in Cash | $657.4M | $135.3M | -$380.1M | $6.5M | -$835.0M |
Analyst Estimates (Annual)
Last updated: Jun 17, 2026 3:00am (10d ago)| Metric | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Revenue |
$7.0B $6.9B – $7.2B
|
$7.5B $7.2B – $7.9B
|
$8.0B $7.8B – $8.3B
|
$8.5B $8.3B – $8.8B
|
| EBITDA |
$1.6B $1.6B – $1.7B
|
$1.7B $1.7B – $1.8B
|
$1.9B $1.8B – $1.9B
|
$2.0B $1.9B – $2.1B
|
| Net Income |
$1.4B $1.3B – $1.5B
|
$1.5B $1.4B – $1.6B
|
$1.7B $1.6B – $1.7B
|
$1.8B $1.8B – $1.9B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 17, 2026 3:03am (10d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | -1.8% | -5.1% | +8.0% | +3.5% |
| Gross Profit Growth | -2.1% | -7.3% | +7.0% | +3.8% |
| Operating Income Growth | -5.4% | -37.9% | -63.0% | +48.2% |
| Net Income Growth | -29.5% | -31.7% | -47.3% | +12.9% |
| EBITDA Growth | -22.4% | -13.5% | -27.9% | +2.8% |
Insider Trading (Recent)
Last updated: Jun 17, 2026 3:03am (10d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-02 | King Karen Matsushima | A-Award | 83.78 | $0.00 | $0 |
| 2026-04-01 | Kim John Y | A-Award | 1,420.09 | $0.00 | $0 |
| 2026-04-01 | King Karen Matsushima | A-Award | 1,451.89 | $0.00 | $0 |
| 2026-02-03 | Noto Anthony | A-Award | 7,593.00 | $27.00 | $205,011 |
| 2026-02-03 | YANG GEOFFREY Y | A-Award | 7,593.00 | $27.00 | $205,011 |
| 2026-02-03 | Waugh Seth H. | A-Award | 7,592.59 | $0.00 | $0 |
| 2026-02-03 | Friedman Alexander S | A-Award | 7,592.59 | $0.00 | $0 |
| 2026-02-03 | King Karen Matsushima | A-Award | 7,592.59 | $0.00 | $0 |
| 2026-02-03 | Kim John Y | A-Award | 7,592.59 | $0.00 | $0 |
| 2026-02-03 | Thiel John W | A-Award | 7,593.00 | $27.00 | $205,011 |
| 2026-02-04 | Noto Anthony | A-Award | 7,593.00 | $27.00 | $205,011 |
| 2026-02-03 | Byerwalter Mariann H | A-Award | 7,593.00 | $27.00 | $205,011 |
| 2026-01-11 | King Karen Matsushima | A-Award | 97.43 | $0.00 | $0 |
| 2026-01-05 | JOHNSON JENNIFER M | G-Gift | 6,272.00 | $0.00 | $0 |
| 2026-01-05 | JOHNSON JENNIFER M | G-Gift | 3,920.00 | $0.00 | $0 |
| 2026-01-02 | Kim John Y | A-Award | 1,407.56 | $0.00 | $0 |
| 2026-01-02 | King Karen Matsushima | A-Award | 1,439.08 | $0.00 | $0 |
| 2025-12-26 | JOHNSON JENNIFER M | G-Gift | 1,272.00 | $0.00 | $0 |
| 2025-12-26 | JOHNSON JENNIFER M | G-Gift | 6,360.00 | $0.00 | $0 |
| 2025-12-26 | JOHNSON GREGORY E | G-Gift | 1,272.00 | $0.00 | $0 |
Dividend History (Last 20)
Last updated: Jun 12, 2026 12:04pm (14d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-29 | $0.33 | 2026-05-20 | 2026-06-29 | 2026-07-10 |
| 2026-03-31 | $0.33 | 2026-02-03 | 2026-03-31 | 2026-04-10 |
| 2025-12-30 | $0.33 | 2025-12-17 | 2025-12-30 | 2026-01-09 |
| 2025-09-30 | $0.32 | 2025-08-27 | 2025-09-30 | 2025-10-10 |
| 2025-06-27 | $0.32 | 2025-05-21 | 2025-06-27 | 2025-07-11 |
| 2025-03-31 | $0.32 | 2025-02-04 | 2025-03-31 | 2025-04-11 |
| 2024-12-30 | $0.32 | 2024-12-04 | 2024-12-30 | 2025-01-10 |
| 2024-09-30 | $0.31 | 2024-08-26 | 2024-09-30 | 2024-10-11 |
| 2024-06-28 | $0.31 | 2024-05-21 | 2024-06-28 | 2024-07-12 |
| 2024-03-27 | $0.31 | 2024-02-06 | 2024-03-28 | 2024-04-12 |
| 2024-01-03 | $0.31 | 2023-12-12 | 2024-01-03 | 2024-01-12 |
| 2023-09-28 | $0.30 | 2023-09-06 | 2023-09-29 | 2023-10-13 |
| 2023-06-29 | $0.30 | 2023-06-08 | 2023-06-30 | 2023-07-14 |
| 2023-03-30 | $0.30 | 2023-02-07 | 2023-03-31 | 2023-04-14 |
| 2022-12-29 | $0.30 | 2022-12-13 | 2022-12-30 | 2023-01-13 |
| 2022-09-29 | $0.29 | 2022-08-29 | 2022-09-30 | 2022-10-14 |
| 2022-06-29 | $0.29 | 2022-06-08 | 2022-06-30 | 2022-07-15 |
| 2022-03-30 | $0.29 | 2022-02-23 | 2022-03-31 | 2022-04-14 |
| 2021-12-30 | $0.29 | 2021-12-14 | 2021-12-31 | 2022-01-14 |
| 2021-09-29 | $0.28 | 2021-08-24 | 2021-09-30 | 2021-10-15 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
The raw numbers tell a more interesting story than the "terminal decline" framing the synthesis and market-forces models are leaning on. Look at the quarterly trajectory: NI went from -$84.7M in Sep-24 to $92M, $151M, $164M (wait, ordering) — the actual sequence from Sep-24 forward is -$84.7M → $163.6M → $151.4M → $92.3M → $117.6M → $255.5M → $346.6M. The two most recent quarters show net income roughly doubling sequentially, with margins recovering from 5% to 11% to 15.1%. Revenue is stable at $2.29-2.34B. That's not a death spiral — that's an earnings inflection. TTM NI is roughly $812M against the stated $525M FY25 figure, meaning the reported 21x P/E is already stale; on annualized recent-quarter run-rate ($1.2B+), the multiple is closer to 14x. The synthesis model citing a "36.5x P/E" appears to be using a different (older, more depressed) earnings window and is anchoring its entire thesis on a number the data contradicts.
That said, the bear case has real teeth and I don't want to over-rotate on two quarters. Annual operating income collapsed from $1.88B (FY21) to $604M (FY25) — a 68% decline against roughly flat revenue, which is textbook fee compression plus the Western Asset / Macro Opportunities outflow disaster (the Sep-24 loss quarter reflects litigation/charges from that). The Sep-23 to Sep-24 op income drop from $1.10B to $407M is brutal. So the question is whether the recent Q margin recovery to 15% is (a) Western Asset noise washing out, (b) market-driven AUM tailwind from 2024-2025 equity rally, or (c) genuine operational normalization. If it's (a)+(b), we're looking at a cyclically inflated print right as markets sit at highs — exactly the wrong time to extrapolate. The 5.75% dividend yield on $911M FCF against ~$1.6B in dividend obligations (rough estimate at $1.24/yr × ~520M shares ≈ $645M, actually covered) is sustainable for now but thin.
The contrarian read against the model consensus: every model is treating BEN as a value trap, but P/B of 0.99x, 5.75% yield, $3.57B cash, insider awards (not sales — the prior model flagged "significant insider buying" but these look like routine grants, so I'd discount that signal), and a visible earnings recovery in the last two prints is the setup for a re-rating, not a death spiral. The market-forces "death spiral" language is overwrought — Franklin has $1.6T AUM, growing alternatives exposure (Lexington, Benefit Street, Clarion), and trades at trough book value. Compare to IVZ at similar P/S — these are both being priced for permanent impairment. Where I agree with the bears: revenue CAGR of 5.7% overstates organic health (it includes Legg Mason acquisition base effects), earnings CAGR of -22.9% is the real signal, and active management fee compression is structural, not cyclical.
Where the data is thin: total debt isn't reported in the tile, which is a material omission for an asset manager carrying acquisition debt from Legg Mason and Putnam — without it I can't size leverage risk properly. The insider "buying" signal is misclassified (A-Awards are grants, not open-market purchases). The Sep-25 FY annual NI of $525M doesn't reconcile cleanly with the quarterly sum (~$617M from the four quarters Dec-24 through Sep-25), suggesting restatements or one-time items I can't see. I dissent from the synthesis "Disconnected from Fundamentals" verdict and from market-forces "Strong Headwinds" — both are over-indexed on stale FY24 margins and ignore the Q1/Q2 FY26 inflection. The narrative model's "anchored / at DCF fair value" read is the most honest of the bunch. At $33, you're paying ~14x forward earnings if the recent run-rate holds, 0.99x book, with a 5.75% covered yield. The asymmetry favors longs if margins hold above 10%; it's a value trap only if Q3 reverts to sub-7% margins.
GPT Critique
Upon reviewing the raw data for Franklin Resources, Inc., several key points emerge. The company has shown a recent recovery in net income, with the most recent quarter displaying a net income of $346.6M and a margin of 15.1%, up from previous lows. This suggests an earnings inflection rather than a terminal decline, as their quarterly net income has consistently improved from a negative $84.7M in September 2024 to positive figures thereafter. This trajectory indicates a stabilization in revenue, which has hovered around $2.29B to $2.34B in recent quarters. However, the annual data reveals a long-term decline in operating income, which fell from $1.88B in 2021 to $604M in 2025, despite relatively stable revenue. This highlights ongoing fee compression and challenges in their asset management business.
I agree with Claude Opus's assessment that the P/E ratio cited by the synthesis model is misleadingly high due to its reliance on older data. Opus correctly identifies that, based on the most recent earnings, the P/E is closer to 14x rather than the 36.5x suggested by older figures. Furthermore, I concur with Opus's view that the market-forces model's "death spiral" language is exaggerated. The company's strong cash position of $3.57B and a sustainable dividend yield of 5.75% suggest a degree of financial stability, contradicting the notion of immediate terminal decline. However, I disagree with Opus's assertion that recent insider transactions are significant. As Opus notes, these are routine grants rather than open-market purchases, which dilutes the signal of insider confidence.
Opus's narrative challenges the market consensus of a value trap by emphasizing Franklin's potential for re-rating if recent margin improvements are sustained. This perspective is compelling given the company's significant AUM and diversification into alternative investments. However, I remain cautious about the longer-term structural issues highlighted by the declining earnings CAGR of -22.9% and persistent fee compression. While recent quarters show promising income recovery, the annual decline in operating income and the lack of clear visibility on total debt raise concerns about the sustainability of this trend.
A careful skeptic might argue that both our views could be overly optimistic if the recent margin improvements are primarily driven by temporary factors, such as market-driven AUM tailwinds, rather than genuine operational improvements. Additionally, the lack of detailed debt information could mask potential leverage risks, which are significant for a company with recent acquisition activity.