Capital International Inc. CA Boosts Stock Position in Paychex, Inc. $PAYX

Key Points

• Capital International Inc. CA increased its stake in Paychex by 15.8% in Q3, buying 32,985 shares to hold 241,308 shares worth about $30.6 million (roughly 0.07% of the company).
• Wall Street sentiment has cooled: several analysts cut price targets (e.g., Citigroup, Morgan Stanley, Wolfe) and MarketBeat shows a consensus rating of "Reduce" with a $123.94 target.
• Paychex beat Q3 estimates (EPS $1.26 vs. $1.23; revenue $1.56B, +18.3% YoY), set FY2026 guidance of 5.48–5.53 EPS, and returned capital via a $1.0B buyback authorization plus a $4.32 annual dividend (yield ~4.4%).

Capital International Inc. CA lifted its position in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 15.8% during the third quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 241,308 shares of the business services provider's stock after buying an additional 32,985 shares during the period. Capital International Inc. CA owned about 0.07% of Paychex worth $30,588,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds have also bought and sold shares of PAYX. Heartwood Wealth Advisors LLC bought a new stake in shares of Paychex in the 3rd quarter worth approximately $25,000. MMA Asset Management LLC purchased a new position in Paychex in the 3rd quarter worth $32,000. Westfuller Advisors LLC purchased a new stake in Paychex during the third quarter valued at about $35,000. Caitlin John LLC purchased a new position in shares of Paychex in the third quarter worth about $36,000. Finally, E Fund Management Hong Kong Co. Ltd. lifted its stake in shares of Paychex by 193.2% in the 3rd quarter. E Fund Management Hong Kong Co. Ltd. now owns 346 shares of the business services provider's stock valued at $44,000 after acquiring an additional 228 shares during the last quarter. 83.47% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

A number of research firms have issued reports on PAYX. Citigroup decreased their price objective on shares of Paychex from $139.00 to $120.00 and set a "neutral" rating on the stock in a research report on Monday, December 22nd. TD Cowen reissued a "hold" rating on shares of Paychex in a research report on Monday, December 1st. Morgan Stanley lowered their price objective on Paychex from $133.00 to $123.00 and set an "equal weight" rating for the company in a research report on Monday, December 22nd. Jefferies Financial Group set a $110.00 price target on shares of Paychex in a research note on Friday, December 19th. Finally, Wolfe Research decreased their target price on shares of Paychex from $130.00 to $115.00 and set an "underperform" rating for the company in a research note on Wednesday, December 10th. One research analyst has rated the stock with a Buy rating, thirteen have assigned a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Reduce" and a consensus target price of $123.94.

Paychex Stock Performance

PAYX stock opened at $98.30 on Tuesday. The stock has a market capitalization of $35.29 billion, a PE ratio of 22.29 and a beta of 0.91. The stock's 50 day simple moving average is $101.94 and its 200 day simple moving average is $115.04. Paychex, Inc. has a 12-month low of $86.89 and a 12-month high of $161.24. The company has a current ratio of 1.27, a quick ratio of 1.27 and a debt-to-equity ratio of 1.17.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings results on Friday, December 19th. The business services provider reported $1.26 earnings per share for the quarter, topping 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 firm had revenue of $1.56 billion during the quarter, compared to analysts' expectations of $1.55 billion. During the same quarter in the previous year, the business earned $1.14 earnings per share. The company's revenue was up 18.3% on a year-over-year basis. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. As a group, research analysts forecast that Paychex, Inc. will post 4.99 earnings per share for the current fiscal year.

Paychex Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, February 27th. Stockholders of record on Wednesday, January 28th were paid a $1.08 dividend. The ex-dividend date was Wednesday, January 28th. This represents a $4.32 dividend on an annualized basis and a dividend yield of 4.4%. Paychex's payout ratio is currently 97.96%.

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

Paychex Profile

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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