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J.P. Morgan: Legacy products a drag on Franklin Resources' organic growth

Written by Jasir Jawaid

J.P. Morgan analyst Kenneth Worthington initiated coverage on Franklin Resources Inc., writing that while the acquisition of Legg Mason diversifies its business away from outflow-heavy legacy products, it will be a struggle to return to positive net sales in the near term.

Outflows remain elevated in the company's Global Bond and Income strategies and its Global Equity franchise.

"We see a more active management team using its large cash position to more aggressively grow and broaden both investment and distribution capabilities via M&A," the analyst wrote.

The price target is $23.00. Worthington's adjusted EPS estimates are $2.66 for 2020 and $2.75 for 2021. He initiated coverage at "neutral."

This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.


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