H&R Block is tumbling hard because of Trump's tax plan
H&R Block is dropping hard Wednesday in pre-market trading.
Disappointing sales guidance for 2019 seems to be the catalyst for the stock drop.
The new tax code could hurt the company's pricing, thus the 2019 guidance.
Shares of H&R Block are plumetting as much as 21% in pre-market trading Wednesday.
This is after the tax preparation company released 2019 guidance below what Wall Street had estiamted. Revenue guidance is $3.05 billion to $3.1 billion, compared to analysts projections of $3.14 billion.
The disappointing forecast is likely a result of the new tax code. Now that the tax rate is lower and the code is simpler, H&R Block has a bit of a problem. When client's tax filings are more complex, H&R Block has more pricing power. Now, filings will be more straightforward and prices could be driven downward.
Shares are down 10.65% on the year.
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