Ahead Of The Bell: Franklin Resources Upgraded

NEW YORK (AP) — Asset manager Franklin Resources Inc. was upgraded Thursday by an analyst because of better-than-expected market performance during the third quarter.

Keefe, Bruyette & Woods Inc. analyst Robert Lee raised his rating on the stock to "Outperform" from "Market Perform." He also increased his earnings estimate and price target.

Lee wrote in a research note that Franklin Resources is seeing improvement in assets under management and revenue growth, which should propel its earnings higher in the coming quarters.

Lee increased his 2009 earnings estimate to $3.48 per share from $3.44 per share. He raised his 2010 earnings estimate to $5.35 per share from $5.05 per share.

Analysts polled by Thomson Reuters, on average, forecast earnings of $3.38 per share for 2009 and $4.89 per share for 2010.

The price target was increased to $110 from $100 to reflect the higher earnings per share estimate.

Aside from growing its already established businesses, Lee said Franklin Resources is in a position to increase its operations through an acquisition, but would only complete a deal under ideal circumstances.