Goldman Sachs turns bullish on select asset managers, upgrades BEN, AMG

Goldman Sachs has upgraded Franklin Resources (BEN) and Affiliated Managers Group (AMG) to Buy, citing improving organic growth prospects and compelling valuations, with BEN projected for 8% EPS CAGR through 2027 and AMG for 7% annual core EBITDA growth. Conversely, AllianceBernstein (AB) was downgraded to Neutral due to slowing growth in its equity and fixed income segments, while WisdomTree was moved to Neutral on accelerating flows. This selective re-rating highlights Goldman's focus on asset managers demonstrating clear catalysts for organic growth and attractive valuation disparities.

Analysis

Goldman Sachs has issued a selective re-rating of traditional asset managers, upgrading Franklin Resources (BEN) and Affiliated Managers Group (AMG) to Buy while downgrading AllianceBernstein (AB) to Neutral. The analysis indicates a strategic preference for firms demonstrating clear catalysts for organic growth and trading at compelling valuations. For Franklin Resources, the upgrade is underpinned by a projected 8% EPS CAGR through 2027, driven by an expanding alternatives platform and moderating outflows from traditional products, which Goldman believes is not yet reflected in its 9x 2026E P/E multiple. Similarly, Affiliated Managers Group's upgrade is based on an expected inflection in organic base fee growth, fueled by AQR platform flows and sustained momentum in private markets, with projections for 7% annual core EBITDA growth. In contrast, AllianceBernstein's downgrade reflects concerns over slowing growth in both its equity and fixed income businesses, limiting its perceived scope for outperformance. WisdomTree (WT) saw a favorable revision to Neutral from Sell, signaling a stabilization due to accelerating flows and a more stable fee trajectory, with expectations for mid-to-high single-digit organic base fee growth.

Key Decisions for Investors

• Investors seeking exposure to the asset management sector should consider focusing on Franklin Resources (BEN) and Affiliated Managers Group (AMG), given Goldman's conviction in their organic growth catalysts and attractive valuations.
• Holders of AllianceBernstein (AB) should note the downgrade to Neutral, which signals concern over decelerating growth in its core businesses and may warrant a portfolio review.
• It is crucial to monitor organic base fee growth and performance in alternative and private market segments for these firms, as these are the primary metrics driving the current analyst ratings.
• WisdomTree (WT) could be considered a potential turnaround play given its upgrade from Sell, but investors should be aware that the Neutral rating suggests stabilization rather than a strong conviction for outperformance at this stage.