Franklin Templeton surges 27% on record inflows, earnings beat
Asset manager posts ninth consecutive quarter of positive flows as AUM hits $1.68 trillion
Franklin Templeton shares rallied on Thursday after the asset manager delivered stronger-than-expected quarterly results, with adjusted earnings per share surging 27.5% above analyst estimates and assets under management reaching a record $1.68 trillion.
The company, which trades under ticker symbol BEN, reported adjusted diluted earnings per share of $0.70 for its fiscal first quarter ended December 31, 2025, significantly beating the $0.55 consensus estimate. Operating revenues reached $2.33 billion, exceeding Wall Street expectations of $1.96 billion by 18.5%, according to the company's earnings press release.
The standout performance came from client flows, with long-term net inflows totaling $28 billion for the quarter—a dramatic reversal from the $50 billion outflow in the same period a year earlier. Excluding Western Asset Management, inflows totaled $34.6 billion, marking the ninth consecutive quarter of positive flows on a comparable basis.
"Our first fiscal quarter continued the momentum we built last year with strong client activity across Franklin Templeton's diversified global platform," said Jenny Johnson, chief executive officer. "Long-term net inflows were $28.0 billion, with record AUM and positive net flows across equity, multi-asset and alternatives strategies, as well as ETFs, retail SMAs and Canvas."
The assets under management milestone of $1,684 billion reflects growing confidence in Franklin Templeton's diverse investment capabilities. The company also rewarded shareholders with a 3% dividend increase to $0.33 per share, up from $0.32 in the prior quarter.
Franklin Templeton's stock closed at $25.88 on Thursday, up 0.86%, giving the company a market capitalization of approximately $13.3 billion. The shares have traded in a 52-week range of $15.60 to $26.25.
Despite the strong quarterly performance, analyst sentiment remains mixed. According to MarketBeat data, the stock carries a consensus "Reduce" rating from 13 Wall Street analysts, with five analysts recommending "sell," five suggesting "hold," and three advising "buy." The average 12-month price target stands at $24.64, implying modest downside from current levels.
Recent analyst moves illustrate the divided view. Barclays analyst Benjamin Budish raised his price target to $25 from $22 on January 15 while maintaining an "Underweight" rating. Conversely, TD Cowen's Bill Katz lowered his target to $30 from $31, keeping a "Buy" recommendation. The highest price target on the Street is $30 from TD Cowen, while the lowest is $21 from Morgan Stanley.
The strong inflows come at a time when the asset management industry is experiencing mixed fortunes, with investors increasingly gravitating toward passive investment vehicles while actively seeking opportunities in alternative investments and emerging markets. Franklin Templeton's diversified platform, spanning traditional mutual funds, ETFs, and alternative strategies, appears to be resonating with clients seeking broad exposure across market cycles.
The company's alternatives fundraising proved particularly robust during the quarter, raising $10.8 billion. This segment has become an increasingly important growth driver for traditional asset managers seeking higher fee structures and differentiated product offerings.
Looking ahead, investors will be watching whether Franklin Templeton can maintain its positive flow momentum amid uncertain market conditions and ongoing competition from both traditional rivals and low-cost passive providers. The ninth consecutive quarter of positive flows suggests the company's strategic pivot toward a more diversified platform may be gaining traction, though the elevated valuation multiples—trailing P/E of 28.02 versus forward P/E of 10.41—indicate expectations remain high.
The company's next catalyst will likely come from its fiscal second-quarter results, scheduled for later this year, as management works to sustain the operational momentum that has positioned the firm to benefit from the broader rotation toward active management strategies in certain market segments.