H&R Block (HRB) Stock | Surges On Buyback, Narrowed Loss


H&R Block, Inc. (NYSE: HRB)


Earnings Report

After the close on Tuesday H&R Block (HRB) reported a narrower loss than expected and sent the share price soaring in the post market session. The company reported a loss of 35 cents per share on $132.72 million in revenue while analysts were expecting a loss of 40 cents per share on revenue of $136 million in revenue. HRB also announced a huge $3.5 billion stock-buyback program due to end in June 2019, which is great for investors as it will raise the value of the outstanding shares by around 38% when complete.

In the conference call, Chief Executive Officer and President Bob Cobb said,

“This is a big day for H&R Block and represents a significant milestone during my tenure as CEO. We’ve put in a lot of hard work to get to this point and I’m excited about what today’s announcement means for our Company and our shareholders . . .starting with the bank divestiture, I’m pleased to announce we’ve reached the final milestone in our efforts to divest our bank and cease being regulated as a savings and loan holding company. Yesterday H&R Block , Inc, H&R Block Bank and BofI Federal Bank closed the definitive purchase and assumption agreement and related agreements, a full month earlier than expected and previously announced”. TheStreet 

HRB also received a price target raise from Credit Suisse to $36 from $35 with a fiscal 2016 EPS raise to $1.97 for $1.84 per share. This was a great earnings release for HRB and is giving the stock plenty of reason to reach for new heights.


HRB Technicals

image (2)

After the close Tuesday, shares of HRB skyrocketed in the post market session to highs of $35.98 before prices settled down and opened the following morning at $35.77.  Prices sold off from the open on high volume and consolidated between $34.80 and $35.40 for most of the day before closing at $35.42, up almost 7.5% from yesterdays close.

HRB opened the year at $33.79 and has since traded mostly below that price hitting a low of $29.15 back in July. The daily chart is pretty choppy with not a lot of direction and with the current price ranging in the $35 area. I would like to see it test the highs for the year at $36.29 and if we can reach new highs on volume we may be looking at the beginning of a new up trend.  Major moving averages are all starting to turn north and the RSI is also getting a nice bounce from this price action, sitting in the high 50s range. HRB is up 4.8% for 2015 as of the close today.


Company Profile

H&R Block, Inc. provides tax preparation and banking services. The company operates its business through three segments: Tax Services, Corporate & Eliminations and Identifiable Assets. The Tax Services segment provides tax return preparation and related services and products in the U.S. and its territories, Canada, and Australia. The Corporate and Eliminations segment includes net interest margin and gains or losses relating to mortgage loans for investment, real estate and residual interests in securitizations, along with interest expense on borrowings, other corporate expenses and eliminations of intercompany activities. The Identifiable Assets segment includes goodwill and intangible assets, associated with each. H&R Block was founded by Henry W. Bloch and Richard L. Bloch on January 25, 1955 and is headquartered in Kansas City, MO. MarketWatch