Federated Hermes (FHI) Stock Forecast & Price Target

Federated Hermes managed $871.2 billion in assets as of September 2025, with a significant emphasis on money market funds, which constitute 75% of the firm's portfolio and are poised to drive approximately 53% of revenue for the year. The firm is experiencing improved equity organic growth thanks to better-than-expected net flows, alongside expectations for increasing institutional demand for money market funds as the Federal Reserve may cut short-term interest rates. Additionally, long-term growth opportunities in alternative strategies further enhance the positive outlook for the firm, supported by an improving macroeconomic environment.

Federated Hermes experienced long-term net outflows totaling $466 million, which were weaker than anticipated, and while there were stronger equity net inflows, substantial fixed-income net outflows offset this positive aspect. The firm's heavy dependence on money market funds, which account for 75% of managed assets, raises concerns, particularly given the current low short-term interest rates that negatively impact yields. Additionally, the industry's shift towards more passively managed products poses a significant threat to Federated Hermes's actively managed assets under management, which could hinder long-term growth and revenue generation.