Analysts Have Been Trimming Their H&R Block, Inc. (NYSE:HRB) Price Target After Its Latest Report

H&R Block, Inc. (NYSE:HRB) just released its latest second-quarter results and things are looking bullish. It looks like a positive result overall, with revenues of US$199m beating forecasts by 6.1%. Statutory losses of US$1.92 per share were 6.1% smaller than the analysts expected, likely helped along by the higher revenues. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the consensus forecast from H&R Block's three analysts is for revenues of US$3.89b in 2026. This reflects a credible 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 2.5% to US$4.72 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.88b and earnings per share (EPS) of US$4.66 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for H&R Block

With no major changes to earnings forecasts, the consensus price target fell 25% to US$41.00, suggesting that the analysts might have previously been hoping for an earnings upgrade. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values H&R Block at US$50.00 per share, while the most bearish prices it at US$32.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of H&R Block'shistorical trends, as the 5.2% annualised revenue growth to the end of 2026 is roughly in line with the 6.2% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.3% annually. So it's pretty clear that H&R Block is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple H&R Block analysts - going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for H&R Block (1 is significant!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.