H&R Block Valued Squarely

H&R Block, Inc. (HRB - Analyst Report) is a leading provider of tax preparation, financial advice, investment, mortgage and business services. The company is the largest provider of tax preparation services in the world, serving taxpayers primarily in the U.S., Canada, and Australia through more than 13,000 retail outlets and via its digital tax solutions.

We reiterate our Hold rating on shares of HRB following the release of Q2 financial results. Although the fallout from the mortgage business implosion will likely be felt for some time to come, and we continue to have significant concerns regarding other aspects of HRB's business, we believe that negative and positive aspects of the company's outlook are now roughly balanced.

Steps have been taken by management to refocus the company on its core tax businesses, and the emphasis on expense reduction should result in improved margins going forward. Our price target of $20.00 per share represents a multiple of 12.5x our 2009 EPS estimate.

Read the full analyst report on HRB