TD Cowen has adjusted its outlook on Federated Hermes Inc. (NYSE: NYSE:FHI), reducing the stock's price target from $34.00 to $33.00 while maintaining a Hold rating.
The new outlook from TD Cowen follows an analysis of the company's second-quarter long-term flow trends, which, according to the firm, were not as negative as some may have perceived.
However, the month-to-date update presented a less favorable view, despite indications of potential positive flow trends beginning to surface, said an analyst from TD Cowen.
TD Cowen analyst noted a mixed picture for Federated Hermes, with long-term flow dynamics being influenced by changing expectations around interest rates. The uncertain environment has prompted the firm to slightly revise its earnings estimates for 2024 and 2025.
The modest decrease in the 12-month price target reflects these updated projections and the current market conditions.
The analyst from TD Cowen also noted that while the second-quarter trends indicated some resilience, the overall picture remains lukewarm, leading to the stock's position towards the lower end of the firm's relative rankings.
InvestingPro Insights
In light of TD Cowen's recent adjustment of Federated Hermes Inc.'s (NYSE:FHI) price target, it's worth considering additional insights provided by InvestingPro. Notably, management's aggressive share buyback strategy and a history of dividend reliability, with dividends maintained for 27 consecutive years, underscore the company's commitment to shareholder returns. Analysts have also revised their earnings upwards for the upcoming period, reflecting optimism about the company's profitability, which is further supported by the fact that Federated Hermes has been profitable over the last twelve months.
InvestingPro Data paints a picture of a company with a solid financial foundation. Federated Hermes boasts a market capitalization of $2.74B and maintains a P/E ratio of 11.91, which adjusts to 11.77 for the last twelve months as of Q2 2024, indicating a potentially undervalued stock relative to earnings. The company has also demonstrated a strong gross profit margin of 66.49% over the same period. Moreover, with a dividend yield of 3.54% and a dividend growth of 10.71%, the company presents an attractive proposition for income-focused investors.
For investors seeking a deeper dive into Federated Hermes' financial health and future prospects, InvestingPro offers additional InvestingPro Tips. With a total of 7 tips available, these insights can help investors make more informed decisions. To access these valuable tips and more, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro. This exclusive offer is a gateway to a wealth of financial data and expert analysis that can empower your investment strategy.
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