Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Franklin- FranklinResources Inc.Resources(BEN.N) Inc. (BEN.N)

Turnaround Story Gaining Momentum, But Still See Risk

PRICE TARGET $34.00 EQUAL-WEIGHT THESIS

Based on 11x P/E multiple of CY2027e (and 7.5x on EV/EBITDA), a slight discount to peers ▪See increasing evidence that a turnaround

given organic growth pressures and secular challenges. Our target P/E multiple a 2x premium is underway, with flow dynamics improving

to 5-yr historical avg given idiosyncratic challenges that are fading at Western and positioning meaningfully over the past several quarters.

in SMAs, ETFs, and Alts that could help support flows. BEN has now delivered nine consecutive

qtrs of positive net flows excluding Western, $33.04

reflecting strengthening momentum across

Consensus Price Target Distribution $26.00 $40.00 the core business.

MS PT

repositioning toward higher-growthSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪BEN's

areas and stabilizing flows support a more

balanced risk/reward profile.

▪However, ongoing structural headwinds

RISK REWARD CHART AND OPTIONS IMPLIED PROBABILITIES (12M) drive more balanced view. Industry growth

continues to skew toward lower-fee

vehicles, e.g., ETFs & SMAs, while outflow

USD challenges persist across higher fee equity

$60.00(+82.76%)$60.00$60.00(+82.76%)(+82.76%) ProbProbProb (>60.00)~0.4%(>60.00)~0.4%(>60.00)~0.4% strategies. Fee compression across the

60 industry also continues to weigh on revenue

outlook.

45 Consensus Rating Distribution

$34.00(+3.56%)$34.00$34.00(+3.56%)(+3.56%)

$32.83$32.83$32.83 ProbProbProb (>34.00)~47.9%(>34.00)~47.9%(>34.00)~47.9% 23% Overweight

30 62% Equal-weight

15% Underweight

15 MS Rating

Source: Refinitiv, Morgan Stanley Research