Federated Hermes, Inc. (FHI)
NYSE:FHI
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Federated Hermes
(NYSE:FHI)
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Rating:79Outperform
Price Target:
$64.00
▲(11.61% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong underlying profitability/ROE and improved leverage, supported by favorable valuation (low P/E and a solid dividend). Technicals are constructive with price above major moving averages, though momentum looks somewhat stretched. Earnings call commentary was broadly positive on AUM and flows but tempered by cost pressures and near-term seasonality, while the disclosed legal action adds a modest risk overhang.
Positive Factors
Record AUM & money-market scale
Scale of ~$900B AUM and a giant money-market franchise provide durable, recurring management fees and cash-like liabilities that stabilize revenue. Large, sticky cash balances offer a steady fee base, distribution muscle and cross-sell leverage to institutional and intermediary clients over time.
Negative Factors
Fixed income outflows
Material fixed-income redemptions reduce a meaningful fee pool and can persist if investor preferences shift or mandates re-price lower fees. Sustained outflows pressure total AUM, fee revenue and diversification, making results more sensitive to product mix and market cycles over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Record AUM & money-market scale
Scale of ~$900B AUM and a giant money-market franchise provide durable, recurring management fees and cash-like liabilities that stabilize revenue. Large, sticky cash balances offer a steady fee base, distribution muscle and cross-sell leverage to institutional and intermediary clients over time.
Read all positive factors
Federated Hermes (FHI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.25B
Dividend Yield2.46%
Average Volume (3M)781.52K
Price to Earnings (P/E)9.7
Beta (1Y)0.50
Revenue Growth9.32%
EPS Growth53.51%
CountryUS
Employees2,000
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.39
Shares Outstanding75,965,670
10 Day Avg. Volume1,013,492
30 Day Avg. Volume781,524
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)3.27
Price to Sales (P/S)2.16
P/FCF Ratio13.27
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.29
Enterprise Value/Gross Profit3.33
Enterprise Value/Ebitda7.16
Forecast
1Y Price Target
$56.75Price Target Upside-1.03% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)5.13
Revenue Forecast (FY)$1.95B
Federated Hermes Business Overview & Revenue Model
Company Description
Federated Hermes, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pensi...
How the Company Makes Money
Federated Hermes generates revenue primarily through management fees charged on the assets it manages across various investment products, including mutual funds, separate accounts, and institutional portfolios. The company earns a percentage of th...
Federated Hermes Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong positive developments: record and rising AUM, standout equity and MDT sales performance, record money market balances, successful private fundraising and a healthy pipeline, revenue growth, strategic expansion (Asia and UK), and active digital/tokenization initiatives. Notable challenges include fixed income outflows, a meaningful increase in distribution expenses tied to share-class mix, reduced performance fees, acquisition-related costs, and expected seasonal Q1 headwinds to revenue and higher compensation expense. On balance, the breadth and magnitude of the positive business and product performance highlights outweigh the operational and timing-related lowlights.Positive Updates
Record Assets Under Management
Ended fiscal year with record AUM of $903 billion; more recent managed assets reported at approximately $909 billion (including $684 billion in money markets, $101 billion in equities, $101 billion in fixed income, $19.5 billion in alternative/private markets, and $3 billion in multi-asset).
Negative Updates
Fixed Income Outflows and Asset Decline
Fixed income assets ended the year at $100 billion, down $1.7 billion q/q. Q4 fixed income net redemptions totaled $2.8 billion (including ~$1.7 billion from two large public entities and a previously disclosed $1 billion high yield redemption).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Assets Under Management
Ended fiscal year with record AUM of $903 billion; more recent managed assets reported at approximately $909 billion (including $684 billion in money markets, $101 billion in equities, $101 billion in fixed income, $19.5 billion in alternative/private markets, and $3 billion in multi-asset).
Read all positive updates
Company Guidance
Management offered detailed guidance and metrics: they closed 2025 with record AUM of $903B (recent managed assets ~ $909B), including money‑market assets of ~$683B (reported also as ~$684B a few days later) and money‑market mutual fund assets near $500–508B, equities ~$101B, fixed income ~$100–101B, alternatives ~$19.5B and multi‑asset ~$3B; they expect the FCP acquisition to close in 2026 (target Q2) with additional transaction costs of about $9.2M and an initial purchase consideration of $215.8M cash plus $23.2M in Class B stock, an estimated 2026 tax rate of 25–28% (24.4% effective in Q4), and Q1 seasonality that should lower revenues by ~$10.2M and distribution expense by ~$2.6M while increasing compensation-related expenses by roughly $8M; Q4 results showed revenue up $13.4M (3%)—driven by ~$8M from higher money‑market assets and $5.5M from equities—operating expenses up $7.3M (2%, distribution expense +$8.8M), cash & investments of $724M ($680M ex non‑controlling interest), and a business pipeline including ~$2.7B of unfunded institutional mandates (≈$1.2B to private markets, $1.4B to equities — ~$1.3B to MDT — and ~$0.1B to low‑duration fixed income); notable flows and fundraising: 2025 gross equity sales $31B (Q4 $9B) with full‑year net equity inflows $4.6B (vs $10.7B net redemptions in 2024), MDT Q4 gross sales ~$4B and >$2B net (MBE 2025 gross $19.1B/net $13B), fixed income assets ~$100B with Q4 net redemptions $2.8B (ultra‑short inflows +$624M), and private markets closings including EDL III $780M and PEC VI ~ $300M to date.Federated Hermes Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.81B | 1.63B | 1.61B | 1.45B | 1.30B |
| Gross Profit | 1.33B | 1.09B | 1.05B | 933.10M | 767.96M |
| EBITDA | 582.52M | 416.70M | 427.60M | 396.40M | 396.28M |
| Net Income | 403.30M | 268.31M | 298.98M | 239.50M | 270.29M |
Balance Sheet | |||||
| Total Assets | 2.29B | 2.08B | 2.10B | 2.02B | 2.02B |
| Cash, Cash Equivalents and Short-Term Investments | 725.64M | 641.04M | 560.67M | 521.75M | 426.67M |
| Total Debt | 457.01M | 461.97M | 457.94M | 452.78M | 346.07M |
| Total Liabilities | 1.03B | 933.96M | 947.75M | 912.97M | 840.97M |
| Stockholders Equity | 1.20B | 1.10B | 1.13B | 1.05B | 1.11B |
Cash Flow | |||||
| Free Cash Flow | 294.58M | 342.53M | 303.92M | 319.58M | 159.96M |
| Operating Cash Flow | 297.35M | 346.55M | 311.83M | 323.95M | 170.38M |
| Investing Cash Flow | 165.93M | 64.25M | -30.61M | -32.36M | 10.82M |
| Financing Cash Flow | -401.81M | -286.40M | -243.09M | -168.51M | -249.47M |
Federated Hermes Technical Analysis
Positive
57.34
Price Trends
54.89
Positive
52.79
Positive
50.84
Positive
Market Momentum
0.52
Positive
59.12
Neutral
72.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FHI, the sentiment is Positive. The current price of 57.34 is above the 20-day moving average (MA) of 56.43, above the 50-day MA of 54.89, and above the 200-day MA of 50.84, indicating a bullish trend. The MACD of 0.52 indicates Positive momentum. The RSI at 59.12 is Neutral, neither overbought nor oversold. The STOCH value of 72.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FHI.
Federated Hermes Risk Analysis
Federated Hermes disclosed 23 risk factors in its most recent earnings report. Federated Hermes reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Federated Hermes Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.25B | 9.70 | 35.33% | 2.46% | 9.32% | 53.51% | |
78 Outperform | $3.29B | 12.97 | 18.76% | 8.93% | ― | -12.92% | |
70 Outperform | $4.17B | 12.51 | 15.65% | 3.00% | 33.03% | -3.55% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $3.13B | 21.00 | 28.53% | 3.92% | 12.73% | 19.01% | |
65 Neutral | $2.84B | 9.21 | 73.54% | 8.72% | 5.46% | 2.10% | |
64 Neutral | $3.23B | 13.71 | 8.30% | 11.70% | 24.12% | 1.09% |
* Financial Sector Average
FHI
Federated Hermes
56.00
16.44
41.55%
AB
AllianceBernstein
35.66
0.37
1.05%
CNS
Cohen & Steers
60.83
-14.97
-19.75%
GBDC
Golub Capital Bdc
12.26
-1.43
-10.42%
APAM
Artisan Partners
35.13
-0.69
-1.93%
VCTR
Victory Capital Holdings
65.13
9.37
16.80%
Federated Hermes Corporate Events
Legal Proceedings
Federated Hermes Faces Legal Action Over Wind Farm Investment
Negative
Jan 30, 2026
On January 5, 2026, Hermes GPE LLP and Hermes Infrastructure II GP LLP, subsidiaries of Federated Hermes, acknowledged service of legal proceedings in the High Court in London brought by Aberdeen City Council as administering authority of the Aber...
Executive/Board Changes
Federated Hermes Announces Leadership Changes Effective 2026
Neutral
Dec 2, 2025
On December 2, 2025, Federated Hermes announced upcoming leadership changes effective April 30, 2026, as part of its succession plan. John B. Fisher will step back from his role as President and CEO of the Federated Advisory Companies, with Paul A...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.