Royal Bank Of Canada Reiterates “Sector Perform” Rating for Paychex (NASDAQ:PAYX)

Paychex (NASDAQ:PAYX)‘s stock had its “sector perform” rating reaffirmed by analysts at Royal Bank Of Canada in a report released on Thursday, Benzinga reports. They presently have a $130.00 target price on the business services provider’s stock. Royal Bank Of Canada’s price objective points to a potential upside of 26.43% from the company’s previous close.

Several other analysts also recently commented on the stock. Cantor Fitzgerald reaffirmed an “underweight” rating and set a $107.00 target price on shares of Paychex in a report on Monday, July 20th. Weiss Ratings raised Paychex from a “hold (c-)” rating to a “hold (c)” rating in a research note on Monday, July 20th. Wells Fargo & Company boosted their price objective on shares of Paychex from $95.00 to $111.00 and gave the company an “underweight” rating in a research report on Wednesday, September 9th. BMO Capital Markets dropped their target price on shares of Paychex from $118.00 to $113.00 and set a “market perform” rating for the company in a report on Thursday. Finally, Raymond James Financial raised Paychex from a “market perform” rating to an “outperform” rating and set a $210.00 price objective on the stock in a report on Thursday, July 16th. One research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, thirteen have assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, the company presently has an average rating of “Hold” and a consensus price target of $129.82.

Paychex Stock Down 1.6%

Shares of Paychex stock traded down $1.67 during trading hours on Thursday, reaching $102.82. 1,798,734 shares of the company’s stock were exchanged, compared to its average volume of 3,501,265. The company has a 50 day moving average of $119.04 and a two-hundred day moving average of $104.09. Paychex has a fifty-two week low of $85.45 and a fifty-two week high of $130.32. The company has a current ratio of 1.26, a quick ratio of 1.26 and a debt-to-equity ratio of 1.22. The stock has a market cap of $36.57 billion, a P/E ratio of 21.03, a P/E/G ratio of 2.40 and a beta of 0.82.

Paychex (NASDAQ:PAYX) last released its earnings results on Wednesday, September 23rd. The business services provider reported $1.34 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.32 by $0.02. Paychex had a return on equity of 50.90% and a net margin of 27.03%.The business had revenue of $1.63 billion for the quarter, compared to analyst estimates of $1.63 billion. During the same quarter in the prior year, the company posted $1.22 earnings per share. Paychex’s revenue was up 5.9% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.896-6.006 EPS. On average, sell-side analysts forecast that Paychex will post 5.96 EPS for the current fiscal year.

Insiders Place Their Bets

In other Paychex news, CFO Robert L. Schrader sold 2,600 shares of Paychex stock in a transaction dated Monday, July 20th. The stock was sold at an average price of $115.09, for a total transaction of $299,234.00. Following the completion of the sale, the chief financial officer owned 18,547 shares of the company’s stock, valued at $2,134,574.23. The trade was a 12.29% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Joseph M. Tucci sold 3,907 shares of the stock in a transaction on Friday, June 26th. The shares were sold at an average price of $98.25, for a total transaction of $383,862.75. Following the transaction, the director directly owned 67,364 shares in the company, valued at approximately $6,618,513. This represents a 5.48% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders own 0.60% of the company’s stock.

Institutional Trading of Paychex

A number of institutional investors have recently modified their holdings of PAYX. Capital International Investors increased its stake in shares of Paychex by 59.1% in the 4th quarter. Capital International Investors now owns 30,265,174 shares of the business services provider’s stock worth $3,395,583,000 after acquiring an additional 11,243,295 shares in the last quarter. BlackRock Inc. purchased a new position in Paychex in the 2nd quarter worth approximately $2,728,970,000. State Street Corp lifted its holdings in shares of Paychex by 2.6% during the second quarter. State Street Corp now owns 14,411,341 shares of the business services provider’s stock valued at $1,417,067,000 after purchasing an additional 361,713 shares in the last quarter. XXEC Inc. bought a new stake in shares of Paychex in the second quarter worth approximately $1,123,016,000. Finally, Geode Capital Management LLC raised its stake in Paychex by 0.8% during 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 buying an additional 78,760 shares during the last quarter. 83.47% of the stock is currently owned by hedge funds and other institutional investors.

Key Headlines Impacting Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Paychex reported fiscal first-quarter adjusted EPS of $1.34, above the roughly $1.32-$1.33 analyst consensus, while revenue reached $1.63 billion, up 5.9% year over year and broadly in line with estimates. Paychex Q1 Earnings and Revenues Surpass Estimates
• Positive Sentiment: PEO and Insurance Solutions revenue grew 12% to $367.6 million, prompting management to raise its fiscal 2027 growth outlook for that segment to 7%-8% from 6%-7%. Operating margin also expanded to 38.0% from 35.2% a year earlier. Paychex Fiscal 2027 First-Quarter Revenue
• Positive Sentiment: Management highlighted faster PEO conversions, expanding artificial-intelligence applications and its new WISE Hire recruiting solution, which is designed to automate candidate sourcing and matching while remaining integrated with Paychex’s HCM platforms. Paychex Q1 Earnings Call
• Neutral Sentiment: Paychex reaffirmed fiscal 2027 revenue growth guidance of 5%-6% and adjusted EPS growth guidance of 7%-9%. Second-quarter revenue guidance of approximately $1.6 billion was generally consistent with consensus, offering limited evidence of near-term acceleration.
• Neutral Sentiment: Analyst views were mixed: JPMorgan upgraded Paychex to neutral with a $115 target, while RBC maintained sector perform with a $130 target. However, UBS, Jefferies, Stifel and Stephens each lowered their targets to $110-$115, generally retaining neutral or hold ratings.
• Negative Sentiment: Management Solutions, Paychex’s largest business, grew only 4% to approximately $1.2 billion. Investors viewed that performance as below expectations, particularly because the company maintained its broader growth outlook rather than raising it. Paychex Key Segment Below Expectations
• Negative Sentiment: Investors also reacted to concerns that GAAP profitability and free cash flow were weaker than adjusted earnings suggested, increasing scrutiny of the quality and sustainability of the reported earnings growth. Why Paychex Stock Dropped

About Paychex

Paychex, Inc is a provider of payroll, human resources, and workforce management solutions for businesses of varying sizes. Its offerings include payroll processing, tax administration, time and attendance tracking, employee benefits administration, retirement services, workers’ compensation and business insurance, recruiting, and compliance support.

The company also provides professional employer organization services, helping businesses manage employment administration and human resources through an integrated platform.