This Just In: Analysts Are Boosting Their Franklin Resources, Inc. (NYSE:BEN) Outlook for This Year

Franklin Resources, Inc. (NYSE:BEN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for Franklin Resources from its eight analysts is for revenues of US$9.7b in 2023 which, if met, would be a huge 23% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 23% to US$2.04. Previously, the analysts had been modelling revenues of US$7.5b and earnings per share (EPS) of US$1.73 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Franklin Resources

Despite these upgrades, the analysts have not made any major changes to their price target of US$24.77, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Franklin Resources at US$28.00 per share, while the most bearish prices it at US$19.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Franklin Resources' rate of growth is expected to accelerate meaningfully, with the forecast 51% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 8.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Franklin Resources is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Franklin Resources.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Franklin Resources that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.