Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 9.0 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.2x
- ▸PEG: 0.41
BEN · Why this verdict
Why Franklin Resources (BEN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward multiple of 10.9x and a PEG of 0.40, the stock screens as deeply discounted relative to its earnings growth rate; this type of discount typically reflects either a genuine value opportunity or a structural quality impairment that permanently depresses the multiple. Value | The multiple re-rates above 14x as cash conversion improves and the quality discount narrows over four quarters. | →Stable |
| CounterFree cash flow is negative relative to net income, and the overall quality profile reflects below-peer profitability ratios; the discounted multiple may rationally reflect these structural impairments rather than a mispricing opportunity. | ||
Consensus earnings estimates have risen roughly 23% over the prior 30 days, a meaningful positive revision that signals analysts are materially upgrading the business outlook; revisions of this magnitude typically precede continued earnings beats and can sustain upward price momentum. Sentiment | Estimates continue to trend upward and the company delivers another beat at the next reporting date in late July 2026. | →Stable |
| CounterThe stock has already reached and slightly surpassed the analyst consensus price target, meaning the estimate upgrades may be largely reflected in the current price with no remaining room to the consensus objective. | ||
Free cash flow is negative relative to net income — the company retains only a fraction of reported earnings as actual cash — introducing uncertainty about whether the attractively-valued reported multiples will prove durable as the quality discount persists. Quality | FCF-to-net-income turns positive and exceeds 50% within four quarters, confirming the quality gap is temporary rather than structural. | →Stable |
| CounterA Piotroski F-Score of 9 out of 9 — a perfect reading across all balance-sheet and profitability checks — suggests overall financial health is sound; the FCF shortfall may reflect specific timing items rather than a systemic quality failure. | ||
The stock has reached and slightly surpassed the analyst consensus price target, leaving essentially no upside to the current objective; buyers entering at current levels are not being compensated for the quality and momentum risks present in this name. Bear case | If the thesis is wrong, consensus targets are revised upward above the current price as the earnings trajectory and estimate upgrades prompt analysts to update their models. | →Stable |
| CounterThree consecutive double-digit earnings beats and a 23% upward estimate revision trend suggest analysts are behind the company's actual momentum; a target revision could quickly follow the next strong quarterly report. | ||
After a modest miss in August 2025, the company delivered three consecutive positive earnings surprises, including the two most recent beats of 29% and 28% above estimates; this reestablished streak suggests cost discipline and improving revenue visibility. Earnings | A fourth consecutive beat at the late-July 2026 reporting date, extending the recent streak to four in a row. | →Stable |
| CounterThe stock is trading just above its analyst target; strong earnings execution may already be priced in, and a beat at the next quarter would need to be substantial to move the stock materially higher from current levels. | ||
At a forward multiple of 10.9x and a PEG of 0.40, the stock screens as deeply discounted relative to its earnings growth rate; this type of discount typically reflects either a genuine value opportunity or a structural quality impairment that permanently depresses the multiple.
→StableValue
- Expectation
- The multiple re-rates above 14x as cash conversion improves and the quality discount narrows over four quarters.
CounterFree cash flow is negative relative to net income, and the overall quality profile reflects below-peer profitability ratios; the discounted multiple may rationally reflect these structural impairments rather than a mispricing opportunity.
Consensus earnings estimates have risen roughly 23% over the prior 30 days, a meaningful positive revision that signals analysts are materially upgrading the business outlook; revisions of this magnitude typically precede continued earnings beats and can sustain upward price momentum.
→StableSentiment
- Expectation
- Estimates continue to trend upward and the company delivers another beat at the next reporting date in late July 2026.
CounterThe stock has already reached and slightly surpassed the analyst consensus price target, meaning the estimate upgrades may be largely reflected in the current price with no remaining room to the consensus objective.
Free cash flow is negative relative to net income — the company retains only a fraction of reported earnings as actual cash — introducing uncertainty about whether the attractively-valued reported multiples will prove durable as the quality discount persists.
→StableQuality
- Expectation
- FCF-to-net-income turns positive and exceeds 50% within four quarters, confirming the quality gap is temporary rather than structural.
CounterA Piotroski F-Score of 9 out of 9 — a perfect reading across all balance-sheet and profitability checks — suggests overall financial health is sound; the FCF shortfall may reflect specific timing items rather than a systemic quality failure.
The stock has reached and slightly surpassed the analyst consensus price target, leaving essentially no upside to the current objective; buyers entering at current levels are not being compensated for the quality and momentum risks present in this name.
→StableBear case
- Expectation
- If the thesis is wrong, consensus targets are revised upward above the current price as the earnings trajectory and estimate upgrades prompt analysts to update their models.
CounterThree consecutive double-digit earnings beats and a 23% upward estimate revision trend suggest analysts are behind the company's actual momentum; a target revision could quickly follow the next strong quarterly report.
After a modest miss in August 2025, the company delivered three consecutive positive earnings surprises, including the two most recent beats of 29% and 28% above estimates; this reestablished streak suggests cost discipline and improving revenue visibility.
→StableEarnings
- Expectation
- A fourth consecutive beat at the late-July 2026 reporting date, extending the recent streak to four in a row.
CounterThe stock is trading just above its analyst target; strong earnings execution may already be priced in, and a beat at the next quarter would need to be substantial to move the stock materially higher from current levels.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Franklin Resources screens deeply discounted at a forward multiple of 10.9x with a PEG of 0.40 and consensus estimates rising 23% over 30 days, but the stock has slightly exceeded the analyst target, free cash flow is negative relative to net income, and the entry asymmetry has flipped unfavorable — the fundamental setup is more interesting than the current entry point suggests.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 1.7 |
| Gross margin | 3.5 |
| Op margin | 6.9 |
| Net margin | 4.1 |
| Current ratio | 7.5 |
| FCF quality | 0.0 |
| Moat | 6.5 |
| Piotroski F | 10.0 |
- ▸Earnings quality RED FLAG: -33% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
| EPS growth | 10.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 7.8 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.4 |
- ▸Overbought (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.2 |
| erm sentiment | 10.0 |
- ▸Estimates rising as sentiment proxy (+23.4%)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 2.8 |
| growth rank | 7.1 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 1.0 |
| 52w position | 9.7 |
| gap | 5.0 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 5.2 |
| volatility | 5.1 |
| put call | 10.0 |
| implied vol | 2.5 |
| beta | 4.7 |
| debt equity | 9.1 |
- ▸High IV: 65%
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 9.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 3.5 |
- ▸Estimates up 23.4% (30d)
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $34.11 has reached target $33.86. No upside to wait for.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=+1|SANITY:WAIT+price>=TPPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.55
Upside
-17.5%
Downside
11.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 3/4 beat streak
SuitabilityAggressive — Beta 1.58>1.3
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:6.7>=5.5. Top dim: Growth at 7.3; weakest: Peer rank at 3.9. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 7.3, Value at 6.9, and Catalyst at 6.8; the weakest are Peer rank at 3.9, Technical at 4.1, and Quality at 4.7. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.55 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Estimate Upgrade Momentum
Trip ifConsensus earnings estimate revisions fall below 0% for 2 consecutive months, reversing the current +23.4% upward trend.
- P2Cheap Valuation Growth Discount
Trip ifForward P/E expands above 14x (from the current 10.9x) as the market re-rates on improved cash conversion.
- P3Negative Fcf Earnings Quality
Trip ifFCF-to-net-income turns positive and exceeds 50% (from the current -33%) for 2 consecutive quarters.
- P4Stock Above Analyst Target
Trip ifConsensus analyst price target is revised above $35 (from the current $32.27), restoring more than 7% upside from the current price of $32.51.
- P5Earnings Beat Streak Continuation
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the three-quarter beat streak.