H&R Block: Strong Buy Rating Backed by Strategic Initiatives and Valuation Upside
H&R Block has received a Buy rating from Alexander Paris, citing strong financial performance and strategic initiatives. The company reported a 4.6% increase in Q4 revenues, though EBITDA and adjusted EPS fell slightly short due to higher costs. H&R Block's share repurchase and dividend increases demonstrate strong shareholder returns. The upcoming CEO transition to Curtis Campbell is viewed positively. Initial guidance for fiscal 2026 suggests revenue growth above expectations, and the stock is trading at a discount, supporting a price target of $62, indicating a potential 23% upside.
Alexander Paris has given his Buy rating due to a combination of factors including H&R Block’s recent financial performance and strategic initiatives. The company reported a 4.6% increase in fourth-quarter revenues, surpassing expectations, although EBITDA and adjusted EPS were slightly below consensus due to higher healthcare costs and tax rates. Despite these challenges, H&R Block’s share repurchase program and dividend increases reflect strong shareholder returns, with the company buying back 6.5 million shares and raising its dividend for the eighth consecutive year.
Additionally, the upcoming CEO transition to Curtis Campbell, who has a successful track record at TaxAct, is seen as a positive step for the company’s future. The initial guidance for fiscal 2026 indicates revenue growth above expectations, and the stock is currently trading at a discount compared to its historical averages and peers. This valuation, along with the company’s strategic initiatives, supports the Buy rating and a price target of $62, representing a potential 23% upside.
