Overview#

Morgan Stanley has adjusted its price target for Franklin Resources (NYSE:BEN) from $22 to $21 while keeping an Underweight rating on the stock. Currently, Franklin Resources shares are trading at $27.49, which is significantly higher than the new target. However, some data suggests that the stock may still be undervalued, with a fair value estimated at $31.10.

Asset Management Insights#

The revision in price target comes after Morgan Stanley reviewed the company's assets under management (AUM) as of March 2026. The end-of-period AUM matched Morgan Stanley's previous estimates for the first quarter of 2026, although the firm has slightly lowered its average AUM forecast by 0.6%. In terms of inflows, the first quarter of 2025 saw $16.6 billion in long-term inflows, surpassing Morgan Stanley's earlier estimate of $13.1 billion, indicating a growth rate of 4.2% instead of the previously expected 3.3%.

Expense Growth Projections#

Morgan Stanley has also updated its expectations for expense growth. The firm now anticipates a 0.6% year-over-year increase in adjusted expenses for 2026, excluding certain costs like performance fees. This is a revision from a previous estimate of just 0.1% growth. For 2027, the expected expense growth has been raised to 1.8% from 1.3%.

Earnings Estimates and Dividend Yield#

In terms of earnings, Morgan Stanley has lowered its estimates for earnings per share (EPS) for the first quarter of 2026 by 2.6%, now projecting $0.55 instead of $0.56. The EPS estimates for the full years of 2026 and 2027 have also been reduced. Despite these adjustments, Franklin Resources continues to offer a strong dividend yield of 4.85% and has a history of paying dividends for 46 consecutive years. Additionally, the stock's PEG ratio of 0.39 suggests it may be an attractive option relative to its growth potential.

Recent Developments#

Recently, Franklin Resources reported AUM of $1.68 trillion as of March 31, 2026, down from $1.73 trillion at the end of February, largely due to negative market conditions. Despite this, the company reported net inflows of $5 billion in March. In a strategic move, Franklin Templeton announced plans to acquire 250 Digital, a cryptocurrency investment management firm. Furthermore, shareholders approved amendments to stock incentive plans at the recent annual meeting.