UBS Group Has Lowered Expectations for Paychex (NASDAQ:PAYX) Stock Price

Key Points

• UBS cut its price target for Paychex from $98 to $94 and kept a "neutral" rating, implying roughly a 5.2% upside from the prior close.
• Analysts are mixed overall and MarketBeat's consensus is a "Reduce" rating with a consensus price target of $106.38 (breakdown: 1 Strong Buy, 1 Buy, 12 Hold, 4 Sell).
• Paychex beat the quarter (EPS $1.71 vs $1.67; revenue $1.81B vs $1.78B, +19.9% YoY), approved a $1.0 billion share buyback (~2.5% of shares), and its stock traded around $89.32 (50-day MA $93.61; 200-day MA $107.76).

Paychex (NASDAQ:PAYX - Get Free Report) had its target price cut by research analysts at UBS Group from $98.00 to $94.00 in a research note issued on Monday,Benzinga reports. The brokerage presently has a "neutral" rating on the business services provider's stock. UBS Group's price target indicates a potential upside of 5.24% from the company's previous close.

Other analysts have also recently issued reports about the company. TD Cowen dropped their price target on Paychex from $95.00 to $94.00 and set a "hold" rating for the company in a report on Tuesday, April 7th. BMO Capital Markets increased their price objective on Paychex to $52.00 and gave the stock an "outperform" rating in a research report on Thursday, March 26th. Cantor Fitzgerald raised Paychex to a "strong sell" rating in a report on Tuesday, January 27th. Citigroup reduced 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. Finally, Argus upgraded shares of Paychex to a "strong-buy" rating in a research note on Friday, March 27th. One equities research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, twelve have given a Hold rating and four have assigned a Sell rating to the stock. According to MarketBeat, Paychex has a consensus rating of "Reduce" and a consensus price target of $106.38.

Paychex Stock Performance

Shares of NASDAQ:PAYX traded up $3.75 on Monday, hitting $89.32. The company had a trading volume of 4,372,517 shares, compared to its average volume of 4,043,576. The stock has a market cap of $32.00 billion, a price-to-earnings ratio of 19.67 and a beta of 0.88. The stock has a 50 day moving average price of $93.61 and a 200 day moving average price of $107.76. Paychex has a 1-year low of $85.45 and a 1-year high of $161.24. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 1.13.

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

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

Institutional Investors Weigh In On Paychex

Large investors have recently bought and sold shares of the company. Vanguard Group Inc. boosted its position in shares of Paychex by 12.1% during the 4th 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 in the last quarter. Capital International Investors raised its position in Paychex by 59.1% during the fourth quarter. Capital International Investors now owns 30,265,174 shares of the business services provider's stock valued at $3,395,583,000 after purchasing an additional 11,243,295 shares in the last quarter. State Street Corp lifted its stake in Paychex by 1.6% during the fourth quarter. State Street Corp now owns 13,988,393 shares of the business services provider's stock worth $1,569,218,000 after purchasing an additional 216,045 shares during the last quarter. Charles Schwab Investment Management Inc. lifted its stake in Paychex by 2.3% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 11,550,173 shares of the business services provider's stock worth $1,295,698,000 after purchasing an additional 263,152 shares during the last quarter. Finally, Geode Capital Management LLC boosted its holdings in shares of Paychex by 0.8% in the 4th quarter. Geode Capital Management LLC now owns 9,705,424 shares of the business services provider's stock valued at $1,093,958,000 after purchasing an additional 78,760 shares in the last quarter. 83.47% of the stock is currently owned by institutional investors and hedge funds.

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.

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