The Analyst Verdict: Federated Hermes In The Eyes Of 5 Experts

In the preceding three months, 5 analysts have released ratings for Federated Hermes FHI, presenting a wide array of perspectives from bullish to bearish.

Summarizing their recent assessments, the table below illustrates the evolving sentiments in the past 30 days and compares them to the preceding months.

Insights from analysts' 12-month price targets are revealed, presenting an average target of $37.2, a high estimate of $47.00, and a low estimate of $33.00. Experiencing a 2.62% decline, the current average is now lower than the previous average price target of $38.20.

Deciphering Analyst Ratings: An In-Depth Analysis

The standing of Federated Hermes among financial experts becomes clear with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Responding to changing market dynamics and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their response to recent developments related to Federated Hermes. This offers insight into analysts' perspectives on the current state of the company.
• Rating: Gaining insights, analysts provide qualitative assessments, ranging from 'Outperform' to 'Underperform'. These ratings reflect expectations for the relative performance of Federated Hermes compared to the broader market.
• Price Targets: Understanding forecasts, analysts offer estimates for Federated Hermes's future value. Examining the current and prior targets provides insight into analysts' changing expectations.

Assessing these analyst evaluations alongside crucial financial indicators can provide a comprehensive overview of Federated Hermes's market position. Stay informed and make well-judged decisions with the assistance of our Ratings Table.

Stay up to date on Federated Hermes analyst ratings.

Delving into Federated Hermes's Background

Federated provides asset management services for institutional and individual investors. The firm had $778.7 billion in managed assets at the end of March 2024, composed of equity (10%), multi-asset (less than 1%), fixed-income (12%), alternative (3%), and money market (74%) funds. That said, the firm's cash-management operations are expected to generate around 47% of Federated's revenue this year, compared with 29%, 13%, and 11%, respectively, for the firm's equity, fixed-income, and alternatives/multi-asset operations. From a channel perspective, the company's products are distributed via trust banks, wealth managers and retail broker/dealers (64% of AUM), institutional investors (28%), and international clients (8%).

Federated Hermes's Economic Impact: An Analysis

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

Positive Revenue Trend: Examining Federated Hermes's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 1.57% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.

Net Margin: Federated Hermes's net margin is below industry standards, pointing towards difficulties in achieving strong profitability. With a net margin of 5.22%, the company may encounter challenges in effective cost control.

Return on Equity (ROE): Federated Hermes's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of 1.94%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): Federated Hermes's ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 1.05%, the company may face hurdles in achieving optimal financial performance.

Debt Management: With a below-average debt-to-equity ratio of 0.34, Federated Hermes adopts a prudent financial strategy, indicating a balanced approach to debt management.

What Are Analyst Ratings?

Ratings come from analysts, or specialists within banking and financial systems that report for specific stocks or defined sectors (typically once per quarter for each stock). Analysts usually derive their information from company conference calls and meetings, financial statements, and conversations with important insiders to reach their decisions.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

This article was generated by Benzinga's automated content engine and reviewed by an editor.