Today’s Research Reports on Stocks to Watch: Netflix and H&R Block
Netflix shares hit a new high on Wednesday after a price target increase and bullish note from Goldman Sachs. Shares of H&R Block went the opposite direction, hitting a new low and falling the most the stock has in 30 years after reporting a dismal outlook for full year fiscal 2019.
RDI Initiates Coverage on:
H&R Block, Inc.
Netflix, Inc. shares closed up 4.43% on Wednesday and hit a new high of $384.24 after getting a price target hike from Goldman Sachs. Analyst Heath Terry of Goldman Sachs upped his price target on the streaming giant to $490, the highest target on Wall Street. The analyst wrote, "Looking at the share price’s sensitivity to those long-term expectations for subscribers and normalized EBITDA margins, we see a wide range of outcomes that could potentially drive further upside to our current estimate." He also wrote, "While the widening gap between Netflix’s growing income statement profits and the increasing cash flow statement deficit has seemingly had little impact on the company’s valuation, we do believe that as the gap begins to reverse and Netflix’s cash flow inflects positively in the coming years, NFLX shares should benefit." The firm further said, "We believe the growing content offering and expanding distribution ecosystem will continue to drive subscriber growth above consensus expectations."
Access RDI’s Netflix, Inc. Research Report at:
H&R Block, Inc. shares closed down almost 18% on Wednesday with about 30.7 million shares traded. Volume was significant yesterday as average trading volume for the stock is just about 2.5 million shares. The stock hit a low of $23.33, falling the most in 30 years, after the company released fourth quarter results and an outlook late Tuesday. For the fourth quarter, H&R Block reported net income of $1.1 billion, or $5.45 a share. This represented a growth of 46% from the year ago period. Revenue for the quarter grew to $2.39 billion, from $2.33 billion a year ago. Analysts polled by FactSet had expected GAAP earnings of $5.23 a share on revenue of $2.34 billion. The company also revealed that it is increasing its dividend by 4% to 25 cents a share, payable on July 2. While all this looked good, the company’s outlook for full year fiscal 2019 was worrisome. The company expects revenue to be in the range of $3.05 and $3.1 billion in 2019, compared with analysts’ estimates of $3.14 billion. CEO Jeff Jones said, "We achieved our goal of improving the client trajectory and delivered positive financial results for the fiscal year. We’re also making progress on our multi-year strategic framework. As we look ahead to fiscal 2019, we will make strategic investments to enhance the relevance of our brand, strengthen technology platforms, and improve the fundamental value clients receive from H&R Block.
Access RDI’s H&R Block, Inc. Research Report at:
Our Actionable Research on Netflix, Inc. (NASDAQ: NFLX) and H&R Block, Inc. (NYSE: HRB) can be downloaded free of charge at Research Driven Investing.
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