Oppenheimer Reaffirms Their Hold Rating on H&R Block

By Ryan Adsit

Oppenheimer analyst Scott Schneeberger maintained a Hold rating on H&R Block (NYSE: HRB) today. The company’s shares closed yesterday at $29.60.

Schneeberger commented:

“FY18 adjusted EPS of $2.98 (+52% y/y) outperformed our estimate/consensus of $2.84/$2.80 on higher than anticipated revenue (+4.1% y/y)/adjusted EBITDA (+4.0% y/y). HRB grew FY18 total US volume/revenue per return y/y and achieved a (second consecutive) 29.8% adjusted EBITDA margin. However, the FY18 performance was overshadowed by HRB’s unanticipated introduction of FY19 guidance (historically introduced in 1.9-3.5% y/y decline in revenue/adjusted EBITDA margin of 24-26%. These guidance metrics were significantly lower than expected as HRB’s investing to “achieve sustainable growth for the long-term” via a lower pricing strategy/technology investments/improved operations. HRB didn’t provide much incremental detail/establish a roadmap for the investment phase/nor what to specifically expect thereafter. This will likely unsettle investors as HRB shifts to a longer-term “show me” story.”

According to TipRanks.com, Schneeberger is a 5-star analyst with an average return of 13.8% and a 71.1% success rate. Schneeberger covers the Services sector, focusing on stocks such as Service Corp International, Landstar System Inc, and General Finance.

H&R Block has an analyst consensus of Moderate Buy, with a price target consensus of $29.67.

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The company has a one-year high of $31.80 and a one-year low of $23.59. Currently, H&R Block has an average volume of 2.5M.

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H&R Block, Inc. provides tax preparation and other services. It offers assisted and do-it-yourself tax return preparation solutions through multiple channels and distribute the H&R block-branded financial products and services, including those of its financial partners, to the general public primarily in the U.S., Canada, Australia, and their respective territories. The company was founded by Henry W. Bloch and Richard L. Bloch on January 25, 1955 and is headquartered in Kansas City, MO.