Franklin Resources Stock Drops 13% in One Day

Franklin Resources Inc. (NYSE: BEN) experienced a significant decline in its stock price, dropping 12.6% on August 21, contrasting sharply with a modest 0.42% gain in the S&P 500 index. Over the past three years, BEN's stock has remained relatively stagnant, hovering around $20 since early January 2021, while the S&P 500 has surged approximately 50% during the same period. The stock's performance has been inconsistent, with returns of 39% in 2021, a decline of 18% in 2022, and a modest increase of 17% in 2023. In comparison, the S&P 500 has shown more robust performance, with returns of 27% in 2021, a slight dip of 19% in 2022, and a notable 24% increase in 2023. This trend indicates that Franklin Resources has underperformed relative to the broader market, particularly in 2023. Additionally, the Trefis High Quality Portfolio, which comprises 30 stocks, has consistently outperformed the S&P 500 each year during this timeframe. Despite the recent drop in stock price, analysts maintain a positive outlook, with an average price target of $23, representing an 18% upside from the current market price of $20. This optimism is largely attributed to a substantial increase in investment management fees, driven by a 68% rise in assets under management (AuM), suggesting potential for recovery in the company's stock performance.