H&R Block Drops as CEO Leaves; Significant Blow, Says Macquarie
Shares of H&R Block (HRB) are off $1.81, or 11.5%, at $13.68, and picking up steam, after the company this morning said its CEO, Russ Smyth, is resigning, effective immediately, to become CEO of a private company in Chicago, his home town....in a note to clients this morning, Macquarie Securities’s [securities analyst] Bill Carcache writes that many investors are probably thinking Smyth just decided to throw in the towel.
There’s nothing positive about his leaving, Carcache writes — in fact, it’s a “significant blow,” as he was “one of the company’s most valuable assets,” with charisma, vision and a plan for acquiring share in the business.
“We now quite frankly view H&R Block as an organization that may lack the drive, fierce competitiveness, and strong leadership necessary to outperform.”
As the graph below shows, the longer term picture is not very positive for the publicly held tax prep franchise chain stocks.
H&R Block's share price (blue line: HRB) has fallen 37% since the beginning of the year. Jackson-Hewitt (red line: JTX) has done even worse, falling 77% since the beginning of the year.
But the publisher of TurboTax, Intuit (yellow line:INTU) has chugged cheerfully along--its stock price has risen 17% since January.