UPDATE: Oppenheimer Reiterates Outperform Rating, Raises PT on H&R Block on Re-Rating Momentum
In a report published Friday, Oppenheimer reiterated its Outperform rating on H&R Block (NYSE: HRB), and raised its price target from $24.00 to $27.00.
Oppenheimer noted, “Reiterating our Outperform, our PT increases to $27 from $24. Still anticipating 34% y/y FY13E adj. EPS growth primarily on reduced y/y opex/shares, we're shifting F3Q13E contribution to F4Q13E on the Fiscal Cliff-delayed tax season start. This mid-inning operational/capital restructuring/realignment story has shifted to FY14E on anticipated revenue growth rejuvenation via increased filers/complexity pricing related to Obamacare implementation. Possible increased immigrant volume via the developing Immigration Bill also presents incremental future-year upside potential. These perceived drivers are contributing to a re-rating of HRB from previously depressed levels. Our $27 PT is based on 13.9x our CY13E EPS of $1.94, which is consistent with the market multiple despite HRB's elevated intermediate-term growth profile (23% FY12-14E CAGR)/3.2% dividend yield.”
H&R Block closed on Thursday at $24.86.
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