Franklin Hits New 52-Week High - Analyst Blog


Franklin Hits New 52-Week High

Shares of Franklin Resources Inc. ( BEN ) achieved a new 52-week high, touching $158.96 in the second half of the trading session on May 7. The closing price of this well-know asset manager represents a solid year-to-date return of 22.4%. The trading volume for the session was 341,909 shares.

Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of upside left given its strong estimate revisions over the last 7 days and the expected year-over-year earnings growth of 15.2% for fiscal 2013.

Growth Drivers

Impressive fiscal second-quarter 2013 results - including an earnings surprise of 8.5% and strong assets under management (AUM) position - as well as solid capital deployment activities and a robust capital position have been the primary growth drivers for Franklin.

On Apr 30, Franklin reported second-quarter 2013 earnings of $2.69 per share, significantly beating the Zacks Consensus Estimate by 21 cents. Moreover, results outpaced earnings of $2.42 in the prior quarter. Better-than-expected results came on the back of higher revenues.

As of Mar 31, 2013, total AUM was $823.7 billion, up 5.4% sequentially, driven by market appreciation of $24.5 billion and $18.3 billion of net new flows. Simple monthly average AUM of $807.3 billion during the quarter climbed 6% sequentially. Net new flows were $18.3 billion versus $0.3 billion in the prior quarter.

Moreover, Franklin has now delivered positive earnings surprises for 4 straight quarters with an average beat of 3.6%.

Estimate Revisions Show Potency

For Franklin, over the last 7 days, 9 of the 16 estimates for fiscal 2013 have been revised upward, lifting the Zacks Consensus Estimate by 1.6% to $10.31 per share. For fiscal 2014, 8 of the 17 estimates moved north, helping the Zacks Consensus Estimate advance 1.1% to $11.53 per share.

Some better performing investment managers include Invesco Ltd . ( IVZ ), AllianceBernstein Holding L.P . ( AB ) and Virtus Investment Partners, Inc. ( VRTS ). All these carry a Zacks Rank #1 (Strong Buy).

ALLIANCEBERNSTN (AB): Free Stock Analysis Report

FRANKLIN RESOUR (BEN): Free Stock Analysis Report

INVESCO LTD (IVZ): Free Stock Analysis Report

VIRTUS INVESTMT (VRTS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AB , BEN , IVZ , VRTS

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