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FHI

Federated Hermes Inc – Securities and Commodity Exchanges
Federated Hermes, Inc. is a leading global investment manager with $614.8 billion in assets under management as of Sept. 30, 2020. Guided by its conviction that responsible investing is the best way to create wealth over the long term, its investment solutions span equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies. Providing world- class active investment management and engagement services to more than 11,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes' more than 1,900 employees include those in London, New York, Boston and several other offices worldwide.
Analysis Results
Intrinsic Value $112.74
Latest Price $32.66
Relative Value 71% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 11.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.1%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 470 436
2023 523 448
2024 580 461
2025 645 475
2026 716 488
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 12300 million. This corresponds to a present value of 7740 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2310 million. Adding in the terminal value gives a total present value of 10000 million.

There are presently 89.1 million outstanding shares, so the intrinsic value per share is 112.74.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 559,447,000
Current Cash 0
Current Liabilities 270,707,000
Current Debt 0
Non-Cash Working Capital (NCWC) 288,740,000
Change in NCWC -21,157,000
EBIT 378,975,000
Tax Provision 103,982,000
Depreciation and Amortization 30,010,000
Capital Expenditure -10,421,000
Unlevered Free Cash Flow 272,683,041
Current Assets 575,343,000
Current Cash 0
Current Liabilities 265,446,000
Current Debt 0
Non-Cash Working Capital (NCWC) 309,897,000
Change in NCWC 79,326,000
EBIT 440,337,000
Tax Provision 110,035,000
Depreciation and Amortization 28,563,000
Capital Expenditure -13,500,000
Unlevered Free Cash Flow 426,102,030
Current Assets 461,284,000
Current Cash 0
Current Liabilities 230,713,000
Current Debt 0
Non-Cash Working Capital (NCWC) 230,571,000
Change in NCWC 107,650,000
EBIT 357,343,000
Tax Provision 88,146,000
Depreciation and Amortization 25,922,000
Capital Expenditure -15,045,000
Unlevered Free Cash Flow 389,637,158
Current Assets 304,101,000
Current Cash 0
Current Liabilities 181,180,000
Current Debt 0
Non-Cash Working Capital (NCWC) 122,921,000
Change in NCWC -185,504,000
EBIT 331,908,000
Tax Provision 73,875,000
Depreciation and Amortization 17,087,000
Capital Expenditure -17,274,000
Unlevered Free Cash Flow 63,428,829
Current Assets 437,274,000
Current Cash 0
Current Liabilities 128,849,000
Current Debt 0
Non-Cash Working Capital (NCWC) 308,425,000
Change in NCWC 85,703,000
EBIT 356,816,000
Tax Provision 57,101,000
Depreciation and Amortization 10,637,000
Capital Expenditure -9,799,000
Unlevered Free Cash Flow 385,475,083
Current Assets 359,760,000
Current Cash 0
Current Liabilities 162,538,000
Current Debt 25,500,000
Non-Cash Working Capital (NCWC) 222,722,000
Change in NCWC -39,398,000
EBIT 345,047,000
Tax Provision 119,420,000
Depreciation and Amortization 9,578,000
Capital Expenditure -12,839,000
Unlevered Free Cash Flow 181,527,326
Current Assets 395,828,000
Current Cash 0
Current Liabilities 159,208,000
Current Debt 25,500,000
Non-Cash Working Capital (NCWC) 262,120,000
Change in NCWC 43,886,000
EBIT 279,238,000
Tax Provision 102,920,000
Depreciation and Amortization 9,535,000
Capital Expenditure -6,026,000
Unlevered Free Cash Flow 222,091,174
Current Assets 342,055,000
Current Cash 0
Current Liabilities 149,321,000
Current Debt 25,500,000
Non-Cash Working Capital (NCWC) 218,234,000
Change in NCWC 15,204,000
EBIT 248,992,000
Tax Provision 89,530,000
Depreciation and Amortization 10,704,000
Capital Expenditure -8,850,000
Unlevered Free Cash Flow 172,914,142
Current Assets 339,318,000
Current Cash 0
Current Liabilities 214,205,000
Current Debt 77,917,000
Non-Cash Working Capital (NCWC) 203,030,000
Change in NCWC 41,602,000
EBIT 275,319,000
Tax Provision 92,660,000
Depreciation and Amortization 10,435,000
Capital Expenditure -10,316,000
Unlevered Free Cash Flow 218,547,408
Current Assets 300,062,000
Current Cash 0
Current Liabilities 181,134,000
Current Debt 42,500,000
Non-Cash Working Capital (NCWC) 161,428,000
Change in NCWC -60,227,000
EBIT 326,260,000
Tax Provision 110,883,000
Depreciation and Amortization 10,445,000
Capital Expenditure -8,675,000
Unlevered Free Cash Flow 150,540,770

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