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Federated Hermes Inc Class B FHI Stock Quote

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Morningstar‘s Stock Analysis FHI

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An End to Fee Waivers Offsets the Impact of Declining Long-Term AUM Levels in Federated's Q3

Greggory Warren, CFA Sector Strategist

Analyst Note

| Greggory Warren, CFA |

While there was little in no-moat Federated Hermes' third-quarter results that would alter our long-term view of the firm, we expect to increase our fair value estimate to $35 per share from $33 owing to higher income streams from the company's money market operations than we had been forecasting. We view the shares as being slightly undervalued relative to our revised fair value estimate.

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Key Statistics FHI

Company Profile FHI

Business Description

Federated provides asset management services for institutional and individual investors. The company had $624.4 billion in managed assets at the end of September 2022, composed of equity (12%), multi-asset (1%), fixed-income (14%), alternative (3%), and money market (70%) funds. That said, the firm's cash-management operations are expected to generate around 40% of Federated's revenue this year, compared with 36%, 15%, and 9%, 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 (62% of AUM), institutional investors (28%), and international clients (10%).

1001 Liberty Avenue
Pittsburgh, PA, 15222-3779
T +1 412 288-1900
Industry Asset Management
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2021
Employees 1,968

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