Franklin Resources, Inc.

BEN · NYSE · USD

Analysis

Last 4 earnings calls · through Q3 FY2026

Franklin is no longer waiting for Western to heal. Four businesses it built now drive growth, costs are flat while sales rise, and the margin target keeps moving up — the bet is whether the newer, cheaper products grow big enough to pay for themselves. What has to happen for the margin to go beyond 30%?

  • Growth now comes from four businesses the firm built, not its legacy core.

    Private markets fundraising blew past its raised target, ETFs and tax-managed portfolios set records, and alternatives will finish well above plan. That money pays the highest fees, which funds the cheaper businesses while they scale. How much of the fundraising total arrives as fee-paying assets?

  • Efficiency work, not higher fees, is producing the profit growth.

    Expenses are flat against last year while sales grow, and management moved its margin goal forward again — close to 30% this year, above 29% in 2027. Supporting Western costs several points of margin, so Western healing pays on its own.

  • The fastest-growing products are the cheapest ones.

    ETFs, Canvas and multi-asset solutions charge less than the alternatives business, so the fee rate stays flat. Distributors like Schwab and Merrill want a bigger share of those products, and every new dollar brings in less. How much lower is the fee rate on Canvas and ETF money than on alternatives?

Bullish
  • Private markets fundraising
    The bull case leans on private markets, where management keeps raising its own fundraising targets and now expects many strategies, not one flagship, to carry the year.
  • Diversified vehicle growth
    Growth is spread across ETFs, separately managed accounts and Canvas, so no single product line has to carry flows and clients can be met in the wrapper they prefer.
  • Margin expansion plan
    The bull expects cost savings and scale in newer businesses to lift operating margin toward the plan's target ahead of schedule, turning asset growth into profit growth.
Bearish
  • Western Asset outflows
    The bear points to Western Asset, where clients keep withdrawing money, so reported flow growth depends on everything else outrunning that drag every quarter.
  • Fee rate dilution
    The bear argues the fastest-growing parts of the business charge less, so more assets do not translate into proportionally more revenue and the fee rate keeps slipping.
  • Expense guidance drift
    The bear notes that projected costs for the year have risen each quarter as markets, fundraising and performance raise spending, absorbing much of the promised savings.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Purchase≥$15KMar 23May 13
Alan Armstrong
Republican · Senate · OK
Purchase≥$1KMar 27Jul 21
Ro Khanna
Democratic · House · CA-17
Purchase≥$1KApr 13May 11
Ro Khanna
Democratic · House · CA-17
Sale≥$1KMar 10Apr 7
Ro Khanna
Democratic · House · CA-17
Sale≥$1KMar 23Apr 7

Congressional trading data provided by QuiverQuant

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Product segmentsGeography
FY2025 · USD

How Franklin Resources turned $8.8B of revenue into $604.1M of operating income.

Revenue
Investment Advisory, Management and Administrative Service$7.0B▲ 2.34% YoY
Sales And Distribution Fees$1.5B▲ 6.78% YoY
Shareholder Service$264.5M▲ 15.35% YoY
Service, Other$49.7M▲ 9.23% YoY
Total revenue$8.8B
Gross profit$7.0B80.3%
Operating income$604.1M6.9%
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