Morgan Stanley Expects Long-Term Outflows for Franklin Resources

In a report published Tuesday, Morgan Stanley analyst Betsy L. Graseck reiterated an Equal-Weight rating and $59.00 price target on Franklin Resources BEN. In the report, Morgan Stanley noted, “While we believe BEN will be a long-term winner among asset managers given diversified global platform & strong fund performance, EM and fixed income skew represent formidable near-term headwinds. BEN may see some relative multiple expansion given our -1% outflow forecast in CY14e, turning to +2.5% inflows in CY15e & 9% EPS CAGR in CY13-15e, though investors may continue to assign a discount given sizable fixed income platform & concentration risk concerns. We view BEN as a primary beneficiary of any sustained retail equity re-risking given strong distribution platform and comprehensive product offering.” Franklin Resources closed on Monday at $56.58.