Paychex, Inc. $PAYX Shares Acquired by Truist Financial Corp

Key Points

• Truist Financial Corp increased its stake in Paychex by 33.3% in Q4 to 208,150 shares (about $23.35M), and institutional investors now own roughly 83.47% of the company with Vanguard and other large funds also adding to positions.
• Analyst sentiment has weakened as multiple firms cut price targets (JPMorgan, UBS, Citi, Morgan Stanley), leaving a consensus rating of "Reduce" and a $106.38 average price target.
• Paychex beat quarterly expectations (EPS $1.71 vs. $1.67; revenue $1.81B, +19.9% YoY), and its board authorized a $1.0B share buyback while raising the quarterly dividend to $1.19 (annualized yield ~5.2%).

Truist Financial Corp increased its position in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 33.3% during the 4th quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 208,150 shares of the business services provider's stock after purchasing an additional 51,982 shares during the period. Truist Financial Corp owned 0.06% of Paychex worth $23,350,000 at the end of the most recent quarter.

Other institutional investors have also recently added to or reduced their stakes in the company. Vanguard Group Inc. grew its holdings in Paychex by 12.1% during the fourth quarter. Vanguard Group Inc. now owns 42,348,625 shares of the business services provider's stock worth $4,750,669,000 after acquiring an additional 4,583,157 shares during the period. Select Equity Group L.P. lifted its holdings in Paychex by 15.9% in the 2nd quarter. Select Equity Group L.P. now owns 4,051,413 shares of the business services provider's stock valued at $589,319,000 after acquiring an additional 557,101 shares during the last quarter. Dimensional Fund Advisors LP boosted its position in shares of Paychex by 1.1% during the 3rd quarter. Dimensional Fund Advisors LP now owns 2,805,391 shares of the business services provider's stock valued at $355,650,000 after purchasing an additional 31,321 shares in the last quarter. Ameriprise Financial Inc. boosted its position in shares of Paychex by 0.8% during the 2nd quarter. Ameriprise Financial Inc. now owns 2,280,715 shares of the business services provider's stock valued at $330,908,000 after purchasing an additional 17,869 shares in the last quarter. Finally, Envestnet Asset Management Inc. grew its stake in shares of Paychex by 1.5% in the 3rd quarter. Envestnet Asset Management Inc. now owns 1,979,330 shares of the business services provider's stock worth $250,900,000 after purchasing an additional 30,117 shares during the last quarter. 83.47% of the stock is currently owned by institutional investors and hedge funds.

Analysts Set New Price Targets

A number of analysts recently commented on PAYX shares. JPMorgan Chase & Co. dropped their target price on shares of Paychex from $125.00 to $100.00 and set an "underweight" rating on the stock in a report on Thursday, March 26th. UBS Group decreased their price target on shares of Paychex from $98.00 to $94.00 and set a "neutral" rating on the stock in a research report on Monday, April 13th. Cantor Fitzgerald raised Paychex to a "strong sell" rating in a report on Tuesday, January 27th. Citigroup cut their price objective on Paychex from $120.00 to $99.00 and set a "neutral" rating for the company in a research report on Thursday, March 26th. Finally, Morgan Stanley reduced their price objective on Paychex from $123.00 to $107.00 and set an "equal weight" rating for the company in a research note on Tuesday, April 28th. One equities research analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, twelve have assigned a Hold rating and four have issued a Sell rating to the company. Based on data from MarketBeat.com, Paychex currently has an average rating of "Reduce" and a consensus price target of $106.38.

Paychex Stock Down 1.6%

PAYX stock opened at $91.38 on Thursday. The company has a debt-to-equity ratio of 1.13, a current ratio of 1.26 and a quick ratio of 1.26. The firm has a market capitalization of $32.74 billion, a P/E ratio of 20.13 and a beta of 0.84. Paychex, Inc. has a 52-week low of $85.45 and a 52-week high of $161.24. The company's 50 day simple moving average is $92.38 and its 200-day simple moving average is $103.84.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings data on Wednesday, March 25th. The business services provider reported $1.71 earnings per share for the quarter, topping the consensus estimate 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 for the quarter, compared to analysts' expectations of $1.78 billion. During the same period in the previous year, the company posted $1.49 EPS. The company's quarterly revenue was up 19.9% compared to the same quarter last year. As a group, equities research analysts anticipate that Paychex, Inc. will post 5.5 EPS for the current year.

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

Paychex Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, May 29th. Stockholders of record on Wednesday, May 13th will be issued a dividend of $1.19 per share. This is a positive change from Paychex's previous quarterly dividend of $1.08. This represents a $4.76 dividend on an annualized basis and a dividend yield of 5.2%. The ex-dividend date is Wednesday, May 13th. Paychex's dividend payout ratio is presently 104.85%.

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.

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.