Franklin Q1 Earnings Coming Up: Here's What to Expect From the Stock

Core Insights - Franklin Resources Inc. (BEN) is expected to report a decline in both earnings and revenues for the first quarter of fiscal 2026, with earnings estimated at 56 cents per share, down 5.1% year-over-year, and sales projected at $2.15 billion, reflecting a 4.5% decline from the previous year [1][3][9] Financial Performance - In the last reported quarter, Franklin's earnings exceeded the Zacks Consensus Estimate, driven by higher revenues and improved assets under management (AUM), alongside lower expenses [1][2] - The average earnings surprise for BEN over the last four quarters has been 7.74%, with three quarters beating estimates and one matching [2] Market Conditions - The S&P 500 Index gained approximately 3.1% during the October-December quarter, indicating moderate market performance, which likely benefited Franklin's results through healthy equity returns and steady fixed-income inflows [6] - Despite favorable market conditions, BEN is anticipated to have continued experiencing net outflows, with preliminary AUM as of December 31, 2025, reported at $1.68 trillion, a slight increase from $1.67 trillion in November, but still reflecting long-term net outflows of $1 billion [7] Revenue Estimates - The consensus estimate for investment management fees is $1.7 billion, indicating an 8.7% sequential decline, while sales and distribution fees are estimated at $371 million, reflecting a 2.9% decline [8][10] - Shareholder servicing fees are projected at $62.8 million, suggesting a significant 20.7% decline from the previous quarter [10] Strategic Developments - In November 2025, Franklin partnered with Wand AI to implement agentic AI across its global platform, enhancing investment research and operational efficiency [4] - The acquisition of Apera Asset Management in October 2025 expanded BEN's alternative credit assets under management by over $90 billion, strengthening its capabilities in the European lower middle market [5]