Oppenheimer Rates H&R Block At Perform (HRB)

Oppenheimer & Co. has a Perform rating on shares of H&R Block, Inc. HRB. In a note sent to clients, Oppenheimer writes, "The equivalent of coal in the stocking for HRB's franchisees and investors, HRB announced at 6:50pm ET on Christmas Eve that "as a result of a regulatory directive by the OCC, HSBC is terminating the contract under which HSBC provided all of HRB's refund anticipation loans (RALs)." With HSBC RALs conclusively out of the picture, and alternatives seemingly very limited for HRB with less then three weeks before the 2011 tax season begins, HRB's competitive position appears significantly weakened. We're maintaining our Perform rating and reducing our FY11E and FY12E EPS to $1.44 (-2% y/y; from $1.57) and $1.65 (+14% y/y; from $1.77), respectively." Shares of HRB closed at $12.69 on Thursday, down 21 cents.