BMO Capital Markets Has Lowered Expectations for Paychex (NASDAQ:PAYX) Stock Price

Key Points

• BMO Capital Markets cut its price target on Paychex from $121 to $103 and maintained a "market perform" rating, while several other brokers have trimmed targets—leaving an average analyst target of $122.81 and a consensus rating of "Reduce."
• Paychex beat December-quarter estimates (EPS $1.26 vs. $1.23; revenue $1.56B, +18.3% YoY), set FY2026 guidance of 5.48–5.53 EPS (above the sell‑side average of 4.99), and approved a $1.00 billion share buyback (up to 2.5% of outstanding stock).

Paychex (NASDAQ:PAYX - Get Free Report) had its target price dropped by investment analysts at BMO Capital Markets from $121.00 to $103.00 in a research report issued on Friday, MarketBeat.com reports. The brokerage presently has a "market perform" rating on the business services provider's stock. BMO Capital Markets' price target would indicate a potential upside of 11.71% from the company's current price.

A number of other research firms have also recently issued reports on PAYX. Cantor Fitzgerald upgraded shares of Paychex to a "strong sell" rating in a report on Tuesday, January 27th. Stifel Nicolaus cut their price target on shares of Paychex from $137.00 to $126.00 and set a "hold" rating for the company in a report on Wednesday, December 17th. Jefferies Financial Group set a $110.00 target price on shares of Paychex in a research note on Friday, December 19th. JPMorgan Chase & Co. reduced their price target on Paychex from $140.00 to $125.00 and set an "underweight" rating for the company in a report on Monday, December 22nd. Finally, Morgan Stanley dropped their price target on shares of Paychex from $133.00 to $123.00 and set an "equal weight" rating for the company in a research report on Monday, December 22nd. One equities research analyst has rated the stock with a Buy rating, thirteen have given a Hold rating and four have assigned a Sell rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Reduce" and an average target price of $122.81.

Paychex Trading Up 0.6%

NASDAQ PAYX opened at $92.20 on Friday. The firm's 50-day moving average is $100.80 and its two-hundred day moving average is $114.41. The stock has a market capitalization of $33.10 billion, a P/E ratio of 20.91 and a beta of 0.91. The company has a debt-to-equity ratio of 1.17, a current ratio of 1.27 and a quick ratio of 1.27. Paychex has a 12 month low of $86.89 and a 12 month high of $161.24.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 earnings per share for the quarter, beating the consensus estimate of $1.23 by $0.03. Paychex had a return on equity of 46.38% and a net margin of 26.45%.The company had revenue of $1.56 billion during the quarter, compared to analysts' expectations of $1.55 billion. During the same period in the prior year, the business earned $1.14 earnings per share. Paychex's revenue for the quarter was up 18.3% compared to the same quarter last year. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. On average, sell-side analysts anticipate that Paychex will post 4.99 earnings per share for the current year.

Paychex announced that its Board of Directors has approved a stock buyback plan on Friday, January 16th that permits the company to repurchase $1.00 billion in shares. This repurchase authorization permits the business services provider to buy up to 2.5% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company's board of directors believes its stock is undervalued.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in PAYX. Heartwood Wealth Advisors LLC purchased a new stake in Paychex in the third quarter valued at approximately $25,000. Vermillion & White Wealth Management Group LLC acquired a new position in Paychex in the 3rd quarter valued at approximately $27,000. Stance Capital LLC bought a new stake in Paychex in the third quarter valued at approximately $31,000. MMA Asset Management LLC bought a new stake in Paychex in the 3rd quarter valued at $32,000. Finally, Westfuller Advisors LLC bought a new position in Paychex during the 3rd quarter worth $35,000. 83.47% of the stock is owned by hedge funds and other institutional investors.

About Paychex

Paychex, Inc, founded in 1971 by B. Thomas "Tom" Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company's core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers' compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.

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