Evaluating Federated Hermes: Insights From 4 Financial Analysts

Across the recent three months, 4 analysts have shared their insights on Federated Hermes (NYSE:FHI), expressing a variety of opinions spanning from bullish to bearish.

The following table provides a quick overview of their recent ratings, highlighting the changing sentiments over the past 30 days and comparing them to the preceding months.

Insights from analysts' 12-month price targets are revealed, presenting an average target of $37.0, a high estimate of $44.00, and a low estimate of $32.00. A negative shift in sentiment is evident as analysts have decreased the average price target by 5.13%.

Diving into Analyst Ratings: An In-Depth Exploration

In examining recent analyst actions, we gain insights into how financial experts perceive Federated Hermes. The following summary outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to Federated Hermes. This insight gives a snapshot of analysts' perspectives on the current state of the company.
• Rating: Analyzing trends, analysts offer qualitative evaluations, ranging from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of Federated Hermes compared to the broader market.
• Price Targets: Analysts gauge the dynamics of price targets, providing estimates for the future value of Federated Hermes's stock. This comparison reveals trends in analysts' expectations over time.

For valuable insights into Federated Hermes's market performance, consider these analyst evaluations alongside crucial financial indicators. Stay well-informed and make prudent decisions using our Ratings Table.

Stay up to date on Federated Hermes analyst ratings.

About Federated Hermes

Federated provides asset management services for institutional and individual investors. The company had $715.2 billion in managed assets at the end of September 2023, composed of equity (11%), multi-asset (less than 1%), fixed-income (13%), alternative (3%), and money market (73%) funds. That said, the firm's cash-management operations are expected to generate around 46% of Federated's revenue this year, compared with 31%, 12%, 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 (63% of AUM), institutional investors (27%), and international clients (10%).

Federated Hermes: Delving into Financials

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

Revenue Growth: Over the 3 months period, Federated Hermes showcased positive performance, achieving a revenue growth rate of 5.64% as of 30 September, 2023. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: Federated Hermes's net margin is below industry standards, pointing towards difficulties in achieving strong profitability. With a net margin of 17.81%, the company may encounter challenges in effective cost control.

Return on Equity (ROE): Federated Hermes's ROE stands out, surpassing industry averages. With an impressive ROE of 6.42%, the company demonstrates effective use of equity capital and strong financial performance.

Return on Assets (ROA): Federated Hermes's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 3.46%, the company showcases efficient use of assets and strong financial health.

Debt Management: Federated Hermes's debt-to-equity ratio is below the industry average at 0.42, reflecting a lower dependency on debt financing and a more conservative financial approach.

How Are Analyst Ratings Determined?

Within the domain of banking and financial systems, analysts specialize in reporting for specific stocks or defined sectors. Their work involves attending company conference calls and meetings, researching company financial statements, and communicating with insiders to publish "analyst ratings" for stocks. Analysts typically assess and rate each stock once per quarter.

Analysts may enhance their evaluations by incorporating forecasts for metrics like growth estimates, earnings, and revenue, delivering additional guidance to investors. It is vital to acknowledge that, although experts in stocks and sectors, analysts are human and express their opinions when providing insights.

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