Franklin Templeton's (BEN) years of investment in alternatives, separately managed accounts and active exchange-traded funds are starting to deliver organic growth and wider margins, which should support more durable earnings, UBS said in a note emailed Wednesday.

The bank said the asset manager is on track for positive organic growth in fiscal 2026 for the first time in over a decade, with private markets strength offsetting legacy active outflows.

UBS also expects operating margins to keep expanding, supported by expense discipline, operating leverage and a growing contribution from higher-margin private assets.

The bank assumed coverage on the stock with a buy rating and $40 per share price target.

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