Here's Why Federated Hermes (FHI) is a Strong Value Stock

Zacks Investment Research highlights Federated Hermes (FHI), a global asset manager with $839.8 billion in AUM, as a potentially strong value stock. FHI holds a Zacks Rank of #3 (Hold) with a VGM Score of B and a Value Style Score of B, supported by a forward P/E ratio of 9.74. Four analysts have increased their fiscal 2025 earnings estimates in the last 60 days, raising the consensus estimate to $4.33 per share, and the company has an average earnings surprise of 13.1%.

Analysis

Federated Hermes (FHI), a global asset manager with $839.8 billion in assets under management as of March 31, 2025, presents a mixed but potentially favorable profile according to Zacks Investment Research. The company currently holds a Zacks Rank of #3 (Hold), indicating a neutral short-term outlook. However, supporting this are strong Style Scores, with both its VGM (Value, Growth, Momentum) Score and Value Style Score rated 'B'. This 'B' for Value is underpinned by an attractive forward P/E ratio of 9.74, signaling potential undervaluation. Significantly, FHI has seen positive earnings estimate revisions for fiscal 2025, with four analysts revising their estimates upwards in the past 60 days. This has led to an increase in the Zacks Consensus Estimate by $0.23 to $4.33 per share. Furthermore, FHI has a track record of exceeding earnings expectations, boasting an average earnings surprise of 13.1%. The combination of a Hold rank with strong B-rated Style Scores suggests that, while not a 'Strong Buy', the stock possesses upside potential, particularly from a value perspective, driven by positive analyst sentiment on future earnings.

Key Decisions for Investors

• Investors should consider Federated Hermes for their watchlist, particularly those with a value-oriented strategy, given its 'B' Value Score and attractive forward P/E ratio of 9.74.
• Monitor for continued positive earnings estimate revisions and future upgrades to its Zacks Rank, as these could signal strengthening fundamentals beyond the current 'Hold' status.
• Despite the 'Hold' rank, the positive earnings surprise history of 13.1% and recent upward revisions in FY2025 EPS estimates to $4.33 warrant attention for potential accumulation if broader market conditions or company-specific catalysts turn more favorable.