JPMorgan Downgrades Federated Hermes Inc. (FHI) to Underweight

JPMorgan analyst Kenneth Worthington downgraded Federated Hermes Inc. (NYSE: FHI) from Neutral to Underweight with a price target of $41.00 (from $42.00).

The analyst comments: "After recommending Federated with an OW, we downgraded to Neutral earlier this year as we saw a higher for longer interest rate environment less constructive for outsized money market and fixed income fund growth. While Federated has some strong performance in its MTD fund franchise, overall performance is mediocre and fund flows generally edge to redemptions. Governance remains an issue, with the CEO owning very little stock, which we think contributes to shareholder unfriendly decisions such as enabling FHI’s expulsion from the Russell. We don’t see the management team reversing governance decisions despite operating a large impact investing consultancy. Despite our UW rating, we see modest upside for the shares. However, we believe that Federated will underperform the peers over time on slower organic growth and thus move to an Underweight rating."

For an analyst ratings summary and ratings history on Federated Hermes Inc. click here. For more ratings news on Federated Hermes Inc. click here.

Shares of Federated Hermes Inc. closed at $39.68 yesterday.

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