Oppenheimer Lowers HRB Estimates

H&R Block, Inc. HRB announced at 6:50pm ET on Christmas Eve that "as a result of a regulatory directive by the OCC, HSBC Holdings, plc. HBC is terminating the contract under which HSBC provided all of HRB's refund anticipation loans (RALs),” Oppenheimer reports. “With HSBC RALs conclusively out of the picture, and alternatives seemingly very limited for HRB with less than three weeks before the 2011 tax season begins, HRB's competitive position appears significantly weakened,” Oppenheimer writes. “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.” H&R Block closed Thursday at $12.69; HSBC Holdings closed at $51.47.