After A 15% Rise Over Five Trading Days, What To Expect From Franklin Resources Stock?

BEN: Franklin Resources logo
BEN
Franklin Resources

Franklin Resources stock (NYSE: BEN) has risen by 14.6% over the last five trading days. In comparison, the broader S&P500 has declined by less than 1% over the same period. BEN, which provides investment management and related services to investors, released its first-quarter FY2021 results on May 4, beating the consensus estimates of revenues and earnings. It posted revenues of around $2.08 billion – up 58% y-o-y, primarily driven by higher investment management fees. But will the company continue its upward trajectory over the coming weeks, or is a fall in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price using 20 years of historical stock data, returns for Franklin Resources’ stock average around -4.5% in the next one-month (twenty-one trading days) period after experiencing a 14.6% rise in a week (five trading days). Further, the stock is likely to underperform S&P500 returns by 11% over the next month (twenty-one trading days).

But how would these numbers change if you are interested in holding Franklin Resources’ stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Franklin Resources’ stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

Relevant Articles
  1. Beating S&P500 BY 11% YTD, What To Expect From Travelers Stock?
  2. Up 50% Over The Last 12 Months, Is Hyatt Stock Still Attractive?
  3. Capital One Stock Gained 44% In The Last 6 Months, What’s Next?
  4. Up 8% Year To Date As 5G Gains Traction, What’s Next For Verizon Stock?
  5. Up 32% In The Last 12 Months, Where Is BNY Mellon Stock Headed?
  6. Rallying 30% YTD, What’s Spurring The Rally In Applied Materials’ Stock?

IF BEN stock moved by -5% over five trading days, THEN over the next twenty-one trading days, BEN stock moves an average of 1.17%, which implies an excess return of 0.05% compared to the S&P500.

More importantly, there is a 52.7% probability of a positive return over the next twenty-one trading days and a 51.1% probability of a positive excess return after a -5% change over five trading days.

Some Fun Scenarios, FAQs & Making Sense of Franklin Resources Stock Movements

Question 1: Is the average return for Franklin Resources stock higher after a drop?

Answer:

Case 1: Franklin Resources stock drops by -5% or more in a week

Case 2: Franklin Resources stock rises by 5% or more in a week

Is the average return for Franklin Resources stock higher over the subsequent month after Case 1 or Case 2?

BEN stock fares better after Case 1, with an average return of 1.2% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 0.4% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Franklin Resources stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Franklin Resources stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For BEN stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Franklin Resources after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

BEN’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Franklin Resources stock by changing the inputs in the charts above.

Think Bitcoin could disrupt the banking industry? Looking for upside from Bitcoin adoption without buying into the cryptocurrency itself? Check out our theme on Cryptocurrency Stocks.

 

See all Trefis Price Estimates and Download Trefis Data here

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams