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

Key Points

• Paychex, Inc. has received a consensus recommendation of "Reduce" from fifteen brokerages, with two analysts rating it as a sell, twelve as hold, and one as buy.
• The average 12-month target price for Paychex shares is $141.29, reflecting recent downgrades from multiple analysts.
• Paychex reported a 16.8% increase in revenue year-over-year, achieving $1.54 billion in revenue for the latest quarter, and earnings per share (EPS) of $1.22, exceeding estimates.

Paychex, Inc. (NASDAQ:PAYX - Get Free Report) has earned a consensus recommendation of "Reduce" from the fifteen brokerages that are covering the stock, Marketbeat reports. Two equities research analysts have rated the stock with a sell recommendation, twelve have given a hold recommendation and one has issued a buy recommendation on the company. The average 12-month target price among brokerages that have issued a report on the stock in the last year is $141.2857.

Several equities research analysts have recently weighed in on PAYX shares. Robert W. Baird cut their target price on Paychex from $153.00 to $148.00 and set a "neutral" rating on the stock in a research report on Wednesday, October 1st. BMO Capital Markets cut their price objective on shares of Paychex from $143.00 to $140.00 and set a "market perform" rating on the stock in a report on Wednesday, October 1st. Morgan Stanley cut their price objective on shares of Paychex from $148.00 to $132.00 and set an "equal weight" rating on the stock in a report on Wednesday, October 1st. Citigroup cut their price objective on shares of Paychex from $158.00 to $148.00 and set a "neutral" rating on the stock in a report on Thursday, August 21st. Finally, TD Cowen cut their price objective on shares of Paychex from $140.00 to $126.00 and set a "hold" rating on the stock in a report on Wednesday, October 1st.

Paychex Price Performance

PAYX stock opened at $127.52 on Thursday. The company has a debt-to-equity ratio of 1.15, a current ratio of 1.27 and a quick ratio of 1.27. The firm has a market capitalization of $45.89 billion, a P/E ratio of 28.66, a P/E/G ratio of 2.94 and a beta of 0.92. The business's 50-day moving average is $133.09 and its two-hundred day moving average is $143.25. Paychex has a 1 year low of $119.02 and a 1 year high of $161.24.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings results on Tuesday, September 30th. The business services provider reported $1.22 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.20 by $0.02. The company had revenue of $1.54 billion for the quarter, compared to analyst estimates of $1.54 billion. Paychex had a return on equity of 45.17% and a net margin of 27.85%.Paychex's revenue for the quarter was up 16.8% compared to the same quarter last year. During the same quarter last year, the company earned $1.16 EPS. Paychex has set its FY 2026 guidance at 5.428-5.528 EPS. Analysts anticipate that Paychex will post 4.99 earnings per share for the current fiscal year.

Paychex Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, November 26th. Shareholders of record on Friday, November 7th will be issued a dividend of $1.08 per share. The ex-dividend date of this dividend is Friday, November 7th. This represents a $4.32 dividend on an annualized basis and a yield of 3.4%. Paychex's dividend payout ratio (DPR) is presently 97.08%.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. increased its position in Paychex by 1.3% during the second quarter. Vanguard Group Inc. now owns 32,215,957 shares of the business services provider's stock worth $4,686,133,000 after buying an additional 408,114 shares during the period. State Street Corp increased its position in Paychex by 2.6% during the second quarter. State Street Corp now owns 14,066,067 shares of the business services provider's stock worth $2,046,050,000 after buying an additional 355,294 shares during the period. Charles Schwab Investment Management Inc. increased its position in Paychex by 2.3% during the second quarter. Charles Schwab Investment Management Inc. now owns 11,033,312 shares of the business services provider's stock worth $1,604,906,000 after buying an additional 251,139 shares during the period. Geode Capital Management LLC increased its position in Paychex by 2.8% during the second quarter. Geode Capital Management LLC now owns 10,183,871 shares of the business services provider's stock worth $1,481,053,000 after buying an additional 274,947 shares during the period. Finally, Northern Trust Corp increased its position in Paychex by 3.8% during the first quarter. Northern Trust Corp now owns 4,989,182 shares of the business services provider's stock worth $769,731,000 after buying an additional 181,628 shares during the period. Institutional investors and hedge funds own 83.47% of the company's stock.

About Paychex

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.

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