Compass Point Upgrades H & R Block (HRB) to Buy; Large Buyback on Horizon
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Price: $47.93 +0.59%
Rating Summary:
6 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
6 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Compass Point upgraded H & R Block (NYSE: HRB) from Neutral to Buy, price target raised from $17 to $20.
Analyst, Mike Turner, said, "As the FY12 tax season concludes and we approach a resolution regarding the deployment of HRB's substantial excess capital, we view the risk/reward as skewed to the upside. From a fundamental perspective, we expect the FY12 tax season will show slight revenue growth. Given the prior three years of tax revenue declines, we believe this fundamental turn in the business combined with the streamlining of the company (through the sale of RSM) positions the firm for a balance sheet repositioning that should involve more agressive share repurchases. Further, we believe news such as a potential bankruptcy at ResCap, has increased investor comfort that the parent should be insulated from mortgage putback risk. Thus, as our analysis suggests share repurchases have the potential to exceed 20% of shares outstanding, we believe any potential stock weakness will be viewed as a buying opportunity."
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 $16.76 yesterday.
Analyst, Mike Turner, said, "As the FY12 tax season concludes and we approach a resolution regarding the deployment of HRB's substantial excess capital, we view the risk/reward as skewed to the upside. From a fundamental perspective, we expect the FY12 tax season will show slight revenue growth. Given the prior three years of tax revenue declines, we believe this fundamental turn in the business combined with the streamlining of the company (through the sale of RSM) positions the firm for a balance sheet repositioning that should involve more agressive share repurchases. Further, we believe news such as a potential bankruptcy at ResCap, has increased investor comfort that the parent should be insulated from mortgage putback risk. Thus, as our analysis suggests share repurchases have the potential to exceed 20% of shares outstanding, we believe any potential stock weakness will be viewed as a buying opportunity."
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 $16.76 yesterday.
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