H&R Block’s Strong Fiscal Q3 Performance and Positive Outlook Justify Buy Rating

In a report released today, Alexander Paris from Barrington reiterated a Buy rating on H&R Block (HRB – Research Report), with a price target of $55.00.

Alexander Paris has given his Buy rating due to a combination of factors including H&R Block’s strong performance in the fiscal third quarter, which surpassed expectations, and the company’s outlook suggesting continued robust financial health. In the third quarter, H&R Block showcased a solid revenue increase of 4.4% to $2.185 billion, surpassing both Barrington’s estimate and the consensus. The company’s EBITDA and adjusted earnings per share also exceeded forecasts, with the latter showing a significant 17.6% year-over-year growth.
The confidence in the company is further bolstered by management’s guidance for year-end results, which are expected to be at the higher end of their initial predictions. This optimistic projection is supported by strong tax season performance and solid third quarter results. When considering H&R Block’s valuation metrics, the stock trades at a discount compared to its peers and offers a secure dividend, making it an attractive investment. Paris’s reaffirmed Outperform rating and the $55 price target, which suggests a 12% upside potential, underscore his positive outlook on the company’s financial prospects.

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H&R Block (HRB) Company Description:

H&R Block, Inc. engages in the provision of 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 United States, Canada, and Australia. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955 and is headquartered in Kansas City, MO.