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H&R Block drops 9 percent after Trump-related downgrade

Pedestrians walk past the H&R Block Inc. flagship office in New York, U.S.
Scott Eells | Bloomberg | Getty Images
Pedestrians walk past the H&R Block Inc. flagship office in New York, U.S.

H&R Block shares shed 9 percent Monday after BTIG downgraded the stock to "sell" ahead of a looming Donald Trump administration.

Analysts said the U.S. president-elect's administration could hurt the stock, as Trump has called to simplify the tax process. That could reduce the need for H&R Block's services.

"We recall that Trump in August 2015 said 'it would be a dream of mine to put H&R Block right out of business' by simplifying the tax filing process to the extent that the company's tax preparation services would no longer be in demand," BTIG analysts wrote in a Monday note.

Simplifying the process could make consumers move toward online filing, cutting into H&R Block's profits, analysts wrote.

Republicans will control the House and the Senate and Democrats such as Elizabeth Warren and Bernie Sanders have expressed interest in tax simplification. That makes the prospects of Trump passing his policies increasingly more likely, the analysts said.

They added that other Trump campaign promises, like cracking down on immigration and repealing the Affordable Care Act, could also hurt H&R Block.

In June, the tax services provider reported revenue was $3.04 billion in fiscal 2016, down from $3.08 billion in fiscal 2015.