Deutsche Bank Downgrades Franklin Resources (BEN) to Sell
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Deutsche Bank downgraded Franklin Resources (NYSE: BEN) from Hold to Sell with a price target of $35.
Analyst Brian Bedell said, "We are downgrading Franklin Resources Inc. to Sell from Hold & increasing our price target to $35 from $30, after the stock rallied 12% to $38.49 post the US election results on view of greater likelihood of favorable repatriation combined with market view that DOL fiduciary rule could be repealed. Even if assuming BEN could pay a special dividend next year of ~$12 p/sh if 90% of $8.5bn foreign cash is repatriated at a favorable 10% tax rate, we find fair value of the stock at $35 p/sh, if placing a relative P/E of ~55% on our core 2017 earnings outlook (bottom of our large-cap asset manager peer group given sustained negative organic growth rate exceeding 10% annualized), driving a $23-$24 fair core value before adding $12 p/share potential value of special dividend."
Shares of Franklin Resources closed at $38.49 yesterday.
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