Paychex, Inc. (NASDAQ:PAYX) Given Average Recommendation of "Reduce" by Brokerages

Key Points

• Analyst consensus is negative: 18 brokerages give Paychex an average recommendation of "Reduce" (4 sell, 12 hold, 1 buy, 1 strong buy) with an average 1‑year price target of $106.38.
• Several major firms have recently cut targets and maintained neutral/hold ratings (Citigroup to $99, Morgan Stanley to $107, Baird to $125, Jefferies to $105), reflecting reduced analyst conviction.
• Fundamentals and actions: Paychex beat the quarter with $1.71 EPS and revenue up 19.9% YoY, the board authorized a $1.0 billion buyback (~2.5% of shares), and the stock trades around $93 (below the 200‑day SMA of $104.33 and well under its 1‑year high of $161.24).

Shares of Paychex, Inc. (NASDAQ:PAYX - Get Free Report) have earned an average recommendation of "Reduce" from the eighteen research firms that are presently covering the firm, Marketbeat reports. Four analysts have rated the stock with a sell rating, twelve have assigned a hold rating, one has assigned a buy rating and one has assigned a strong buy rating to the company. The average 1-year price target among brokers that have issued ratings on the stock in the last year is $106.3750.

Several brokerages have issued reports on PAYX. Citigroup dropped their target price on shares of Paychex from $120.00 to $99.00 and set a "neutral" rating for the company in a research report on Thursday, March 26th. Morgan Stanley dropped their target price on shares of Paychex from $123.00 to $107.00 and set an "equal weight" rating for the company in a research report on Tuesday, April 28th. Weiss Ratings reiterated a "hold (c-)" rating on shares of Paychex in a research report on Friday, April 24th. Robert W. Baird dropped their target price on shares of Paychex from $148.00 to $125.00 and set a "neutral" rating for the company in a research report on Thursday, March 26th. Finally, Jefferies Financial Group dropped their target price on shares of Paychex from $110.00 to $105.00 and set a "hold" rating for the company in a research report on Thursday, March 26th.

Paychex Stock Performance

Shares of Paychex stock opened at $93.02 on Monday. Paychex has a 1 year low of $85.45 and a 1 year high of $161.24. The firm has a market cap of $33.33 billion, a PE ratio of 20.49 and a beta of 0.84. 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 company has a 50 day simple moving average of $92.27 and a two-hundred day simple moving average of $104.33.

Paychex (NASDAQ:PAYX - Get Free Report) last announced its earnings results on Wednesday, March 25th. The business services provider reported $1.71 earnings per share (EPS) for the quarter, beating 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 business had revenue of $1.81 billion during the quarter, compared to analyst estimates of $1.78 billion. During the same period in the previous year, the business posted $1.49 earnings per share. Paychex's revenue for the quarter was up 19.9% on a year-over-year basis. Analysts expect that Paychex will post 5.5 earnings per share for the current fiscal year.

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

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the business. Vermillion & White Wealth Management Group LLC purchased a new position in shares of Paychex during the third quarter worth approximately $27,000. Stance Capital LLC purchased a new position in shares of Paychex during the third quarter worth approximately $31,000. MMA Asset Management LLC purchased a new position in shares of Paychex during the third quarter worth approximately $32,000. Westfuller Advisors LLC purchased a new position in shares of Paychex during the third quarter worth approximately $35,000. Finally, Hilton Head Capital Partners LLC purchased a new position in shares of Paychex during the fourth quarter worth approximately $31,000. 83.47% of the stock is owned by hedge funds and other institutional investors.

Paychex Company 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.