It's been a good week for Federated Hermes, Inc. (NYSE:FHI) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.5% to US$40.41. Revenues were US$424m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.25, an impressive 37% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Federated Hermes from four analysts is for revenues of US$1.82b in 2025. If met, it would imply a solid 9.7% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 17% to US$4.35. In the lead-up to this report, the analysts had been modelling revenues of US$1.73b and earnings per share (EPS) of US$4.09 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

See our latest analysis for Federated Hermes

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.5% to US$40.86per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Federated Hermes analyst has a price target of US$46.00 per share, while the most pessimistic values it at US$37.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Federated Hermes' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Federated Hermes is expected to grow much faster than its industry.

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The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Federated Hermes following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Federated Hermes. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Federated Hermes analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that  Federated Hermes is showing  1 warning sign in our investment analysis, you should know about...

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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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