Assenagon Asset Management S.A. Sells 637,799 Shares of Paychex, Inc. $PAYX

Key Points

• Assenagon Asset Management cut its Paychex stake by 76%, selling 637,799 shares and retaining 200,880 shares worth $22.535 million, according to its SEC filing.
• Paychex reported a Q3 beat (EPS $1.71 vs. $1.67; revenue $1.81B, +19.9% YoY) and cited AI initiatives plus the Paycor acquisition as growth drivers, but multiple major firms trimmed targets and the consensus rating stands at "Reduce" with an average target of $114.56.
• The company is returning capital via a $1.00 billion share buyback authorization (up to 2.5% of shares) and a recently paid dividend that annualizes to $4.32 for a ~4.6% yield, though the dividend payout ratio is about 98%.

Assenagon Asset Management S.A. cut its holdings in Paychex, Inc. (NASDAQ:PAYX - Free Report) by 76.0% in the fourth quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 200,880 shares of the business services provider's stock after selling 637,799 shares during the quarter. Assenagon Asset Management S.A. owned approximately 0.06% of Paychex worth $22,535,000 as of its most recent SEC filing.

Several other hedge funds and other institutional investors also recently added to or reduced their stakes in PAYX. Quantum Portfolio Management LLC lifted its stake in Paychex by 3.1% during the second quarter. Quantum Portfolio Management LLC now owns 2,464 shares of the business services provider's stock worth $358,000 after purchasing an additional 75 shares in the last quarter. FAS Wealth Partners Inc. lifted its holdings in Paychex by 3.3% during the 2nd quarter. FAS Wealth Partners Inc. now owns 2,597 shares of the business services provider's stock worth $378,000 after buying an additional 83 shares in the last quarter. Somerset Trust Co boosted its position in Paychex by 0.3% in the 3rd quarter. Somerset Trust Co now owns 32,964 shares of the business services provider's stock valued at $4,179,000 after buying an additional 84 shares during the period. Suncoast Equity Management grew its stake in Paychex by 0.6% during the 3rd quarter. Suncoast Equity Management now owns 14,055 shares of the business services provider's stock worth $1,782,000 after purchasing an additional 85 shares in the last quarter. Finally, 44 Wealth Management LLC grew its position in shares of Paychex by 2.7% during the second quarter. 44 Wealth Management LLC now owns 3,290 shares of the business services provider's stock worth $479,000 after buying an additional 86 shares in the last quarter. 83.47% of the stock is currently owned by institutional investors.

Paychex News Roundup

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Q3 beat: PAYX reported EPS of $1.71 (vs. $1.67 est.) and revenue of $1.81B (+20% YoY), demonstrating demand and top-line momentum that supports recurring-service growth. Zacks: Paychex's Q3 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Growth catalysts: Management highlighted AI initiatives and the Paycor acquisition as drivers of advisory and PEO growth that could expand addressable market and services revenue over time. MSN: PAYX Q1 deep dive: AI initiatives and Paycor integration
• Neutral Sentiment: Analysts largely kept neutral/hold ratings after the print — several firms reiterated balanced views citing solid fundamentals but ongoing macro and execution risks. That keeps near-term analyst guidance mixed rather than uniformly bullish. TipRanks: Solid fundamentals but macro and AI headwinds
• Negative Sentiment: Price-target cuts and downgrades: Multiple major firms trimmed targets and/or ratings this morning — JPMorgan to $100 (underweight), Citigroup to $99 (neutral), Wells Fargo to $95 (underweight), TD Cowen to $95 (hold). Those moves increase downside/near-term selling pressure despite the beat. Benzinga: Analyst price-target updates
• Negative Sentiment: Margin/cost concerns: Some coverage noted rising costs and margin pressure despite robust revenue growth — investors are attentive to whether operating leverage will recover. That commentary contributed to volatile trading after the report. Blockonomi: Cost pressures overshadow performance

Analyst Ratings Changes

PAYX has been the topic of several analyst reports. Morgan Stanley reduced their target price on shares of Paychex from $133.00 to $123.00 and set an "equal weight" rating on the stock in a report on Monday, December 22nd. Cantor Fitzgerald upgraded shares of Paychex to a "strong sell" rating in a report on Tuesday, January 27th. Stifel Nicolaus lowered their target price on shares of Paychex from $137.00 to $126.00 and set a "hold" rating for the company in a research note on Wednesday, December 17th. Citigroup dropped their target price on Paychex from $120.00 to $99.00 and set a "neutral" rating on the stock in a report on Thursday. Finally, BMO Capital Markets decreased their price target on Paychex from $121.00 to $103.00 and set a "market perform" rating for the company in a report on Friday, March 13th. One analyst has rated the stock with a Buy rating, thirteen have assigned a Hold rating and four have assigned a Sell rating to the stock. According to MarketBeat.com, Paychex presently has a consensus rating of "Reduce" and an average target price of $114.56.

Paychex Trading Up 0.2%

NASDAQ PAYX opened at $93.59 on Friday. The company has a debt-to-equity ratio of 1.13, a current ratio of 1.26 and a quick ratio of 1.27. The firm's fifty day moving average price is $97.04 and its 200 day moving average price is $111.26. The company has a market capitalization of $33.60 billion, a price-to-earnings ratio of 20.61 and a beta of 0.91. Paychex, Inc. has a 12 month low of $86.89 and a 12 month high of $161.24.

Paychex (NASDAQ:PAYX - Get Free Report) last announced its quarterly earnings results on Wednesday, March 25th. The business services provider reported $1.71 earnings per share for the quarter, beating analysts' consensus estimates of $1.67 by $0.04. Paychex had a net margin of 25.84% and a return on equity of 48.52%. The firm had revenue of $1.81 billion during the quarter, compared to analysts' expectations of $1.78 billion. During the same period in the previous year, the company earned $1.49 earnings per share. Paychex's quarterly revenue was up 19.9% compared to the same quarter last year. On average, sell-side analysts expect that Paychex, Inc. will post 4.99 earnings per share for the current fiscal year.

Paychex Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, February 27th. Investors of record on Wednesday, January 28th were paid a dividend of $1.08 per share. This represents a $4.32 dividend on an annualized basis and a yield of 4.6%. The ex-dividend date was Wednesday, January 28th. Paychex's dividend payout ratio (DPR) is currently 97.96%.

Paychex declared that its Board of Directors has initiated a share repurchase program on Friday, January 16th that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the business services provider to purchase up to 2.5% of its stock through open market purchases. Stock buyback programs are usually an indication that the company's management believes its stock is undervalued.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.