Federated Hermes (FHI)
NYSE:FHI
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Federated Hermes
(NYSE:FHI)
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Rating:76Outperform
Price Target:
$61.00
▲(7.60% Upside)
Action:ReiteratedDate:05/02/26
The score is driven primarily by strong financial quality (profitability, improving leverage, solid cash conversion) and favorable valuation (low P/E with a meaningful dividend). These positives are partially offset by softer near-term technical momentum and earnings-call headwinds from expected redemptions and acquisition-related costs that may weigh on near-term EPS.
Positive Factors
Scale & money‑market leadership
Large scale and clear money‑market leadership create durable, low‑volatility fee drivers and distribution advantages. Heavy money‑market assets provide stable, interest‑rate‑linked revenue and scale economics that support cross‑selling, funding flexibility, and competitive positioning over months to years.
Negative Factors
Flow volatility and client internalization
Revenue is highly AUM‑sensitive; large client internalizations and sizeable equity and fixed‑income redemptions demonstrate concentration and flow volatility risks. Persistent outflows can compress operating leverage, reduce performance fee opportunities, and meaningfully dent recurring fee revenue over quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & money‑market leadership
Large scale and clear money‑market leadership create durable, low‑volatility fee drivers and distribution advantages. Heavy money‑market assets provide stable, interest‑rate‑linked revenue and scale economics that support cross‑selling, funding flexibility, and competitive positioning over months to years.
Read all positive factors
Federated Hermes (FHI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.13B
Dividend Yield2.46%
Average Volume (3M)826.71K
Price to Earnings (P/E)10.7
Beta (1Y)0.50
Revenue Growth12.27%
EPS Growth45.13%
CountryUS
Employees2,000
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)5.29
Shares Outstanding75,903,656
10 Day Avg. Volume873,963
30 Day Avg. Volume826,711
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 Cap1.01
Enterprise Value/Revenue2.25
Enterprise Value/Gross Profit3.21
Enterprise Value/Ebitda7.26
Forecast
1Y Price Target
$55.25Price Target Upside-2.54% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)5.18
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 primarily makes money by earning asset-based management fees for managing client assets in investment products such as mutual funds, money market funds, separate accounts, and other pooled/collective vehicles. These fees are typic...
Federated Hermes Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly constructive strategic position driven by record AUM, strong equity and MDT sales, robust money market leadership, successful private markets fundraising, and strategic acquisitions that expand capabilities. However, there are notable near‑term headwinds: modest QoQ revenue decline, fixed income and some equity redemptions (including a large client internalization), lower performance fees, and incremental acquisition-related expenses that will pressure near‑term EPS. Digital initiatives are promising but adoption remains uncertain. On balance, the positive business momentum, product wins, fundraising and capital returns slightly outweigh the short-term flow and expense challenges.Positive Updates
Record Assets Under Management
Ended Q1 with record AUM of $907 billion (later noted ~ $902 billion a few days after), driven by gains in equity and money market strategies.
Negative Updates
Fixed Income Outflows and Asset Decline
Fixed income assets ended Q1 just under $100 billion, down $329 million from year-end; fixed income suffered net redemptions of $422 million in Q1 and combined funds/SMAs had net redemptions of $214 million through April 24 (Q2-to-date).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Assets Under Management
Ended Q1 with record AUM of $907 billion (later noted ~ $902 billion a few days after), driven by gains in equity and money market strategies.
Read all positive updates
Company Guidance
Management guided Q2 flows and near‑term financial impacts with a number of specific metrics: they began Q2 with about $1.1 billion of net institutional mandates to be funded and expect roughly $1.4 billion of net inflows into private markets, fixed‑income net sales of about $1.1 billion (driven by a ~$1.8 billion core‑plus win partially offset by ~$800 million of government redemptions), and equity net redemptions of about $1.4 billion (including ~$3.0 billion of global equity outflows partly offset by ~$1.7 billion of MDT additions); MDT momentum remains strong (e.g., $687 million of combined MDT net sales through April 24). They reiterated recent scale—Q1 AUM of $907 billion (recently ≈ $902 billion), record money‑market assets of ≈ $685 billion at quarter‑end (recent breakdown ≈ $668B money markets, $107B equities, $101B fixed income, $22B alternatives, $3B multi‑asset) and an estimated money‑market mutual fund market share of ~6.9%—and flagged Q2 acquisition impacts: an estimated transaction‑related EPS drag of $0.11 (including a corrected $6.2M purchase‑price compensation charge and ≈ $4.6M of lender‑consent fees), FCP is expected to add ≈ $12M of revenue and ≈ $11M of operating expenses in Q2 (including ≈ $3.8M of intangible‑related expense), 2026 effective tax rate guidance of 25–28%, a declared dividend of $0.38, the SCP/FCP acquisition added ~$3.2B of managed assets at close, EDL3 closed at $780M, and PEC co‑invests have closed about $300M to date.Federated Hermes Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.86B | 1.81B | 1.63B | 1.61B | 1.45B | 1.30B |
| Gross Profit | 1.30B | 1.33B | 1.09B | 1.05B | 933.10M | 767.96M |
| EBITDA | 576.09M | 582.52M | 416.70M | 427.60M | 396.40M | 396.28M |
| Net Income | 398.90M | 403.30M | 268.31M | 298.98M | 239.50M | 270.29M |
Balance Sheet | ||||||
| Total Assets | 2.14B | 2.29B | 2.08B | 2.10B | 2.02B | 2.02B |
| Cash, Cash Equivalents and Short-Term Investments | 645.42M | 725.64M | 641.04M | 560.67M | 521.75M | 426.67M |
| Total Debt | 450.51M | 457.01M | 461.97M | 457.94M | 452.78M | 346.07M |
| Total Liabilities | 880.97M | 1.03B | 933.96M | 947.75M | 912.97M | 840.97M |
| Stockholders Equity | 1.20B | 1.20B | 1.10B | 1.13B | 1.05B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 302.10M | 294.58M | 342.53M | 303.92M | 319.58M | 159.96M |
| Operating Cash Flow | 311.89M | 297.35M | 346.55M | 311.83M | 323.95M | 170.38M |
| Investing Cash Flow | 10.52M | 165.93M | 64.25M | -30.61M | -32.36M | 10.82M |
| Financing Cash Flow | -203.38M | -401.81M | -286.40M | -243.09M | -168.51M | -249.47M |
Federated Hermes Technical Analysis
Positive
56.69
Price Trends
56.08
Positive
54.03
Positive
51.94
Positive
Market Momentum
0.30
Positive
50.06
Neutral
59.72
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 56.69 is below the 20-day moving average (MA) of 56.90, above the 50-day MA of 56.08, and above the 200-day MA of 51.94, indicating a neutral trend. The MACD of 0.30 indicates Positive momentum. The RSI at 50.06 is Neutral, neither overbought nor oversold. The STOCH value of 59.72 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.36B | 5.67 | 18.72% | 3.00% | 62.27% | -1.99% | |
76 Outperform | $4.13B | 10.73 | 33.93% | 2.46% | 12.27% | 45.13% | |
73 Outperform | $3.72B | 10.16 | 21.99% | 8.93% | ― | -12.21% | |
70 Outperform | $3.65B | 18.99 | 29.01% | 3.92% | 9.99% | -1.69% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $3.43B | -17.77 | 6.42% | 11.70% | 6.69% | -31.63% | |
60 Neutral | $3.05B | 10.37 | 71.27% | 8.72% | 9.72% | 8.92% |
* Financial Sector Average
FHI
Federated Hermes
55.95
14.16
33.88%
AB
AllianceBernstein
39.11
1.58
4.22%
CNS
Cohen & Steers
72.76
-7.82
-9.71%
GBDC
Golub Capital Bdc
13.16
-0.11
-0.82%
APAM
Artisan Partners
38.02
-1.09
-2.79%
VCTR
Victory Capital Holdings
85.33
24.44
40.14%
Federated Hermes Corporate Events
Business Operations and StrategyM&A Transactions
Federated Hermes Acquires Majority Stake in FCP Manager
Positive
Apr 9, 2026
On April 9, 2026, Federated Hermes completed the acquisition of an 80% majority interest in Chevy Chase-based FCP Fund Manager, which has been converted into Federated Hermes FCP Manager, LLC. The deal, valued at up to $331 million and paid throug...
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.