Federated Hermes Earnings: Increased Outflows From Long-Term Funds Create Headwinds for 2025

There was little in no-moat-rated Federated Hermes' fourth-quarter results that would alter our long-term view of the firm. We expect to leave our $42 per share fair value estimate in place and view the shares as being slightly undervalued right now. Federated closed out December 2024 with $199.2 billion in long-term assets under management, down 3.9% sequentially but up 0.8% on a year-over-year basis. Money market fund assets, meanwhile, stood at $630.3 billion at the end of the fourth quarter, up 6.3% sequentially and 12.6% year over year. The company picked up $37.3 billion in money market flows during the December quarter, bringing full-year flows to $70.4 billion.