Federated Hermes Reaches New 12-Month High After Strong Earnings

Shares of Federated Hermes, Inc. (NYSE:FHI) hit a new 52-week high on October 30, 2023, reaching an intraday peak of $54.99 before closing at $54.06. This surge in stock price follows the company’s impressive quarterly earnings report, where it exceeded analysts’ expectations for both earnings per share and revenue.

The trading volume for the day was relatively low, with only 164 shares changing hands. The previous close stood at $54.01. Analysts have taken note of this performance, with several recent upgrades and ratings changes reflecting growing confidence in the company.

Analyst Ratings and Market Reactions

A series of analysts have recently revised their outlooks on Federated Hermes. On October 8, Weiss Ratings reaffirmed a “buy (b)” rating for the stock. Shortly thereafter, on November 3, JPMorgan Chase & Co. raised their price target from $55.00 to $56.00, maintaining a “neutral” rating. On the same day, Cowen reiterated a “hold” rating, while Evercore ISI boosted its target from $48.00 to $55.00, issuing an “outperform” rating.

Currently, three analysts have rated the stock as a buy, while six analysts have assigned a hold rating. According to MarketBeat, the consensus rating for the stock remains “Hold” with a target price averaging $49.67.

Quarterly Earnings and Dividend Insights

In its latest earnings announcement, Federated Hermes reported earnings per share (EPS) of $1.34, surpassing the analysts’ consensus estimate of $1.11 by $0.23. The company also achieved revenue of $469.45 million, exceeding expectations of $442.67 million. This reflects a significant year-over-year revenue increase of 14.9%.

The company’s return on equity was noted at 33.03%, complemented by a net margin of 21.86%. Last year during the same quarter, Federated Hermes had posted an EPS of $1.06. Analysts forecast that the company will achieve an EPS of 4.04 for the current year.

Additionally, Federated Hermes declared a quarterly dividend of $0.34 per share, which was paid on November 14, 2023. Shareholders of record on November 7 received this dividend, translating to an annualized dividend of $1.36 and a yield of 2.5%. The company’s dividend payout ratio currently stands at 28.39%.

Insider Transactions and Institutional Investments

Recent insider trading activity included transactions by Vice President Dolores D. Dudiak, who sold 999 shares at an average price of $47.87, totaling approximately $47,822.13. Following this sale, Dudiak retained 88,223 shares valued at $4,223,235.01. Another insider, Richard A. Novak, sold 1,249 shares at an average price of $47.85, for a total of $59,764.65. Novak’s remaining holdings now total 57,500 shares, valued at around $2,751,375. Over the past 90 days, insiders have sold a total of 21,709 shares worth approximately $1,049,146.

Institutional investors have also been active in adjusting their positions. Notably, Danske Bank A S purchased a new stake valued at about $1,241,000 in the third quarter. Morningstar Investment Management LLC acquired a position worth around $1,135,000. Furthermore, Schneider Downs Wealth Management Advisors LP dramatically increased its holdings by 3,229.0%, owning 2,657,263 shares valued at $137,992,000 after purchasing an additional 2,577,442 shares.

Collectively, hedge funds and institutional investors hold approximately 75.94% of Federated Hermes stock.

Federated Hermes, Inc. is recognized as a global investment manager offering a variety of asset management solutions, including equity, fixed income, and alternative investments. The firm emphasizes performance-driven outcomes, aligning its investment approaches with client objectives and risk tolerances. With a strong focus on sustainability and responsible investing, Federated Hermes integrates environmental, social, and governance (ESG) factors into its investment processes.