Franklin Resources, Inc. (NYSE:BEN) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Franklin Resources beat earnings, with revenues hitting US$2.1b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Franklin Resources

After the latest results, the seven analysts covering Franklin Resources are now predicting revenues of US$8.26b in 2021. If met, this would reflect a meaningful 19% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 40% to US$3.02. In the lead-up to this report, the analysts had been modelling revenues of US$7.99b and earnings per share (EPS) of US$2.75 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Franklin Resources 5.2% to US$31.00on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Franklin Resources, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$24.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Franklin Resources' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Franklin Resources is forecast to grow faster in the future than it has in the past, with revenues expected to display 42% annualised growth until the end of 2021. If achieved, this would be a much better result than the 3.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.5% per year. So it looks like Franklin Resources is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Franklin Resources following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Franklin Resources going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Franklin Resources (1 shouldn't be ignored!) that we have uncovered.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.