Oppenheimer Has Perform On Jackson Hewitt Tax Service

Oppenheimer & Co. has a Perform rating on Jackson Hewitt Tax Service, Inc. JTX. In a note sent to investors Oppenheimer writes, "JTX delivered seasonally soft F2Q11 adj'd EPS of -$0.66 (flat y/y) vs. our est./consensus of -$0.72/-$.074 on a favorable tax rate. With near certainty, JTX will operate/offer financial settlement products (RALs across 80% & Assisted Refunds across 100% of its system) this tax season. We infer a likely renegotiated credit agreement that waives JTX's FY11 requirement to possess 100% RAL coverage across its system. Additionally, JTX's exclusive relationship with Wal-Mart appears firm. With the market now reflecting recognition that JTX will actually be a viable competitor in the FY11 tax season, the appreciation of its stock price late last week was merited, in our view. That said, we maintain our Perform rating on JTX's continued long-term uncertainty." Shares of JTX gained 37 cents on Friday to close at $1.47, a gain of over 33%.