Federated Hermes (FHI) Stock Forecast & Price Target

Federated Hermes reported $843.7 billion in managed assets at the end of June 2025, with a substantial focus on money market funds, which constitute approximately 75% of its asset mix and are projected to generate around 52% of the firm's revenue this year. The firm anticipates increased institutional investor demand for money market funds as the Federal Reserve begins to cut short-term rates, suggesting a potential boost in cash-management operations. Additionally, there are promising long-term growth opportunities within alternative strategies and an improving outlook for equity organic growth driven by favorable net flows.

Federated Hermes experienced long-term net outflows of $466 million, which was weaker than anticipated, despite improved equity net inflows and disappointing fixed-income net outflows. The company's reliance on cash-management operations for approximately 52% of its revenue poses a particular risk in the current interest rate environment, as low short-term rates could hinder yields from money market funds. Additionally, the ongoing industry trend towards passively managed products is likely to exert continued pressure on the firm's actively managed assets under management (AUM), further complicating its financial outlook.