Paychex, Inc. (NASDAQ:PAYX) Stock Has Average Price Target of $127.59 According to Brokerages

Key Points

• Analysts maintain a consensus “Hold” rating on Paychex, with 13 holds, two sells, two buys and one strong buy among 18 firms. The average 12-month price target is $127.59, though several brokerages recently lowered their targets.
• Paychex shares opened at $98.50, near the lower end of their 52-week range of $85.45 to $129.24. The stock offers a 4.8% dividend yield, supported by a quarterly dividend of $1.19, but its 94.44% payout ratio is high.
• The company slightly beat quarterly earnings expectations, reporting $1.34 EPS versus the $1.32 consensus, while revenue rose 5.9% year over year to $1.63 billion. Institutional investors own 83.47% of Paychex shares.

Paychex, Inc. (NASDAQ:PAYX - Get Free Report) has earned an average rating of "Hold" from the eighteen ratings firms that are covering the company, Marketbeat reports. Two research analysts have rated the stock with a sell recommendation, thirteen have given a hold recommendation, two have issued a buy recommendation and one has issued a strong buy recommendation on the company. The average 1 year price target among brokers that have issued ratings on the stock in the last year is $127.59.

A number of research firms recently issued reports on PAYX. Bank of America decreased their target price on Paychex from $450.00 to $225.00 in a report on Wednesday, July 15th. TD Cowen cut their price target on Paychex from $117.00 to $105.00 and set a "hold" rating on the stock in a report on Friday, September 25th. Cantor Fitzgerald reduced their price target on Paychex from $112.00 to $96.00 and set an "underweight" rating on the stock in a research report on Monday. Citigroup lifted their price objective on Paychex from $140.00 to $150.00 and gave the company a "buy" rating in a research note on Thursday, July 30th. Finally, Stifel Nicolaus lowered their price objective on Paychex from $130.00 to $112.00 and set a "hold" rating for the company in a research report on Thursday, September 24th.

Paychex Price Performance

Paychex stock opened at $98.50 on Thursday. The company has a quick ratio of 1.28, a current ratio of 1.28 and a debt-to-equity ratio of 1.23. Paychex has a 52-week low of $85.45 and a 52-week high of $129.24. The firm has a market cap of $35.06 billion, a PE ratio of 19.54, a price-to-earnings-growth ratio of 2.08 and a beta of 0.82. The company's 50 day moving average is $117.70 and its two-hundred day moving average is $104.23.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings results on Wednesday, September 23rd. The business services provider reported $1.34 EPS for the quarter, topping the consensus estimate of $1.32 by $0.02. Paychex had a net margin of 27.35% and a return on equity of 52.78%. The business had revenue of $1.63 billion during the quarter, compared to the consensus estimate of $1.63 billion. During the same quarter in the previous year, the firm posted $1.22 earnings per share. The company's quarterly revenue was up 5.9% compared to the same quarter last year. Paychex has set its FY 2027 guidance at 5.896-6.006 EPS. On average, research analysts expect that Paychex will post 5.96 EPS for the current fiscal year.

Paychex Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, August 28th. Investors of record on Tuesday, July 28th were issued a $1.19 dividend. The ex-dividend date of this dividend was Tuesday, July 28th. This represents a $4.76 annualized dividend and a yield of 4.8%. Paychex's dividend payout ratio (DPR) is 94.44%.

Insider Transactions at Paychex

In related news, CFO Robert Schrader sold 2,600 shares of Paychex stock in a transaction that occurred on Monday, July 20th. The shares were sold at an average price of $115.09, for a total value of $299,234.00. Following the completion of the transaction, the chief financial officer owned 18,547 shares in the company, valued at $2,134,574.23. The trade was a 12.29% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 0.60% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Paychex

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Capital International Investors lifted its holdings in Paychex by 59.1% during the 4th quarter. Capital International Investors now owns 30,265,174 shares of the business services provider's stock worth $3,395,583,000 after buying an additional 11,243,295 shares during the last quarter. BlackRock Inc. acquired a new stake in shares of Paychex during the 2nd quarter worth about $2,728,970,000. State Street Corp lifted its stake in Paychex by 2.6% during the second quarter. State Street Corp now owns 14,411,341 shares of the business services provider's stock worth $1,417,067,000 after purchasing an additional 361,713 shares during the last quarter. XXEC Inc. purchased a new stake in Paychex during the second quarter worth approximately $1,123,016,000. Finally, Bank of America Corp DE acquired a new position in Paychex in the second quarter valued at approximately $434,061,000. 83.47% of the stock is currently owned by institutional investors and hedge funds.

Paychex Company Profile

Paychex, Inc NASDAQ: PAYX provides payroll, human resources and employee benefits solutions for businesses of varying sizes. Its services are designed to help employers manage workforce administration, compliance and employee-related processes through integrated software and professional support.

The company's offerings include payroll processing, time and attendance tracking, human resources administration, recruiting and onboarding tools, benefits administration, retirement services, workers' compensation and business insurance solutions.

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