Goldman Sachs Upgrades Franklin Resources (BEN) to Buy

Goldman Sachs upgraded Franklin Resources (NYSE: BEN) from Neutral to Buy with a price target of $63.00 (from $53.00).

Analyst Marc Irizarry said, "We upgrade shares of BEN to Buy from Neutral (12-month $63 price target, 12% upside) as we believe ytd underperformance (-400 bp vs. peers) offers a good entry point. Three reasons for our upgrade: (1) Better flow trends, driven by EM and bonds, swinging from headwinds to tailwinds in 2Q. (2) Investors still seem to overlook the firm’s $540 bn equity/hybrid franchise aided by solid/improving returns and a favorable Value tilt. (3) Valuation is attractive in our view at 7X 2015E EV/EBITDA, an even steeper discount than other fixed income peers, plus 10% free cash flow yield and ~$8/share in cash create optionality for future capital deployment and upside potential as payout returns to historical levels."

For an analyst ratings summary and ratings history on Franklin Resources click here. For more ratings news on Franklin Resources click here.

Shares of Franklin Resources closed at $56.17 yesterday.

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