This article was originally published on TipRanks.com
Tax filing giant H&R Block, Inc. (HRB) has filed a trademark infringement case against Block, Inc. (SQ) claiming that the latter “seeks to confuse customers by misappropriating the Block brand name.”Following the news, HRB shares closed down 2% at $23.55 on December 17, while SQ plunged 4.5% to reach a record year low of $158.38.
Trademark Infringement Case
HRB has filed a trademark infringement case against Block, Inc. (formerly known as Square, Inc.), alleging that the company seeks to leverage the goodwill and customer trust created by HRB over more than 6 decades of hard work and customer service.
Both HRB and Block provide financial services, and are direct competitors in tax preparation with Block’s recent purchase of Credit Karma Tax, which was renamed as Cash App Taxes.
According to HRB, since Block’s name changed on December 1, 2021, many of its customers are drawing a link between the two companies. HRB has put in billions of dollars in marketing and built a brand that has earned the loyalty and trust of customers. HRB states that the name change is a violation of its trademark rights and threatens to confuse clients and cause harm.
H&R Block President and CEO, Jeff Jones, said, “Today’s filing is an important effort to prevent consumer confusion and ensure a competitor cannot leverage the reputation and trust we have built over more than six decades… Protecting and defending our brand is crucial.”
Recently, Barrington analyst Alexander Paris maintained a Buy rating on the HRB stock with a price target of $28, which implies 18.9% upside potential to current levels.
Paris expects HRB to report a quarterly loss of $0.85 per share in its upcoming earnings for the fourth quarter.
Overall, the stock has a Moderate Buy consensus rating based on 1 Buy versus 1 Hold. The average H&R Block price target of $28 implies 18.9% upside potential to current levels. Shares have gained 54.9% over the past year.
TipRanks Insider Activity tool shows that Insiders currently have a Positive stance on HRB. In the last three months, corporate insiders have bought shares worth $125,700.
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