Federated Hermes (FHI) Stock Forecast & Price Target

Federated Hermes reported $871.2 billion in managed assets as of September 2025, with a significant emphasis on cash management services, which are projected to account for approximately 53% of its revenue this year. The firm is poised to benefit from increased institutional demand for money market funds, particularly as the Federal Reserve considers cutting short-term rates, while also exploring long-term growth opportunities in alternative strategies. Additionally, the outlook for equity organic growth is improving due to better-than-expected net flows, suggesting a potentially favorable macroeconomic environment that could further support the firm's financial performance.

Federated Hermes reported long-term net outflows of $466 million, which were weaker than anticipated, coupled with significantly higher than expected net outflows from fixed-income products, indicating challenges in maintaining asset under management (AUM). Additionally, the company is heavily reliant on cash management operations, generating approximately 53% of revenue, which could be adversely impacted by low short-term interest rates affecting money market fund yields. The broader industry shift toward passive investing presents a further risk to Federated Hermes's actively managed product AUM, potentially undermining growth prospects in a competitive market environment.