How Investors Are Reacting To Federated Hermes (FHI) Strong Q2 Earnings and New Share Buyback Plan

• In the second quarter ended June 30, 2025, Federated Hermes reported revenue of US$424.84 million and net income of US$91 million, alongside the announcement of a new share repurchase program of up to 5 million shares.
• The repurchase program, aimed at supporting employee compensation plans, potential acquisitions, and other corporate activities, highlights management's confidence and capital flexibility following a period of improved earnings.
• We’ll explore how the strong earnings growth and new share buyback may influence Federated Hermes’ investment outlook and analyst expectations.

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Federated Hermes Investment Narrative Recap

To be a Federated Hermes shareholder, you need to believe the firm can continue growing earnings while managing pressures from fee competition and changing investor preferences. The strong Q2 results and the new share buyback program reinforce management’s current confidence and capital discipline, but do not materially alter the main short-term catalyst: sustained momentum in money market fund assets amid a fluctuating rate environment. The core risk remains pressure on active management revenue from rising popularity of passive and low-cost products.

Of the recent announcements, the new share repurchase program stands out as most relevant to these themes. This move could help maintain earnings per share and provide flexibility for upcoming growth opportunities, especially as the company works to strengthen areas of organic growth that trail larger asset managers. Investors still need to keep an eye on...

Read the full narrative on Federated Hermes (it's free!)

Federated Hermes' narrative projects $1.9 billion revenue and $379.7 million earnings by 2028. This requires 3.3% yearly revenue growth and a $29.8 million earnings increase from $349.9 million currently.

Uncover how Federated Hermes' forecasts yield a $49.00 fair value, a 9% downside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community span a US$49 to US$58.69 range per share. While many see upside, fee compression continues to challenge active managers, reminding you to consider a wide spectrum of investor views.

Explore 4 other fair value estimates on Federated Hermes - why the stock might be worth as much as 9% more than the current price!

Build Your Own Federated Hermes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Federated Hermes research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Federated Hermes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Federated Hermes' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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