Compass Point Reiterates a 'Buy' on H&R Block (HRB); Bar Reset Lower, But Thesis Unchanged

April 26, 2012 10:34 AM EDT
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Price: $22.91 -0.99%

Rating Summary:
    3 Buy, 9 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Compass Point reiterates a 'Buy' on H&R Block (NYSE: HRB) price target lowered from $20 to $18.50.

Analyst, Mike Turner, said, "Last night, HRB released what seemed like an enormous amount of information for what was expectedly going to be just a release of FY12 tax season volumes. To sum up the more important aspects of the release, slightly weaker than expected FY12 returns, but more importantly weak pricing have led to earnings guidance that is about 11% lower than our expectation. Further, they announced a corporate restructuring of management and a cost initiative that is expected to add $85-$100MM to operating income next year. Last, we finally received the long anticipated headline of a more substantial increase in put-back claims ($1.4B)...We are lowering our FY12/13 adjusted EPS estimates from $1.61 and $1.42 to $1.28 and $1.43, respectively."

For an analyst ratings summary and ratings history on H & R Block click here. For more ratings news on H & R Block click here.

Shares of H & R Block closed at $16.74 yesterday.

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