Federated Hermes (FHI) Upgraded to Strong Buy: Here's What You Should Know

Core Viewpoint - Federated Hermes (FHI) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][3]. - A strong correlation exists between earnings estimate revisions and stock price movements, with institutional investors using these estimates to determine fair value [3]. Business Improvement Indicators - The rising earnings estimates and the Zacks rating upgrade suggest an improvement in Federated Hermes' underlying business, indicating potential for stock price appreciation [4]. Importance of Earnings Estimate Revisions - Tracking earnings estimate revisions can be beneficial for investment decisions, and the Zacks Rank system effectively utilizes this data [5][6]. - The Zacks Rank system has a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [6]. Specific Earnings Estimates for Federated Hermes - For the fiscal year ending December 2025, Federated Hermes is expected to earn $4.92 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 9.6% over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of ratings, with only the top 5% of stocks receiving a "Strong Buy" rating, indicating superior earnings estimate revisions [8][9]. - The upgrade of Federated Hermes to Zacks Rank 1 places it in the top 5% of stocks, suggesting potential for higher stock movement in the near term [9].