Goldman Cuts H&R Block to 'Underperform'
Goldman Sachs downgraded H&R Block (HRB ) to underperform from in-line.
Analyst Michael Hodges says although the company's mortgage unit continues to be a strong, near-term positive, he thinks persistently weak tax trends through mid-March make it unlikely that H&R will hit his tax projections. He trimmed the $3.45 fiscal 2003 estimate to $3.42; he is keeping his reduction fairly muted because of mortgage strength, robust e-commerce trends, and what he understands to be aggressive cost initiatives.
Hodges says since tax is such a seasonal, low visibility business, it's hard to see what would drive shares higher in the coming months without a strong foundation for optimism on next year's tax season.