Paychex (NASDAQ:PAYX – Get Free Report)‘s stock had its “sector perform” rating reaffirmed by equities research analysts at Royal Bank Of Canada in a research note issued to investors on Thursday, Benzinga reports. They currently have a $130.00 price target on the business services provider’s stock. Royal Bank Of Canada’s price objective would indicate a potential upside of 27.91% from the company’s current price.
A number of other research firms have also recently weighed in on PAYX. Citigroup raised their price objective on Paychex from $140.00 to $150.00 and gave the stock a “buy” rating in a research report on Thursday, July 30th. Bank of America lowered their price objective on Paychex from $450.00 to $225.00 in a research report on Wednesday, July 15th. BMO Capital Markets lowered their price objective on Paychex from $118.00 to $113.00 and set a “market perform” rating for the company in a research report on Thursday. Stephens lowered their price target on Paychex from $132.00 to $113.00 and set an “equal weight” rating for the company in a research report on Thursday. Finally, Morgan Stanley lifted their price target on Paychex from $107.00 to $109.00 and gave the stock an “equal weight” rating in a research report on Tuesday, June 30th. One equities research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, thirteen have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, Paychex has an average rating of “Hold” and a consensus price target of $129.82.
Check Out Our Latest Report on PAYX
Paychex Trading Down 2.7%
Paychex (NASDAQ:PAYX – Get Free Report) last released its quarterly earnings results on Wednesday, September 23rd. The business services provider reported $1.34 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 firm had revenue of $1.63 billion during the quarter, compared to analyst estimates of $1.63 billion. During the same period in the previous year, the company posted $1.22 EPS. The business’s revenue for the quarter was up 5.9% compared to the same quarter last year. Paychex has set its FY 2027 guidance at 5.896-6.006 EPS. As a group, equities analysts expect that Paychex will post 5.96 EPS for the current year.
Insider Activity
In related news, CFO Robert 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 value of $299,234.00. Following the completion of the transaction, the chief financial officer owned 18,547 shares in the company, valued at $2,134,574.23. The trade was a 12.29% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Joseph Tucci sold 3,907 shares of Paychex stock in a transaction dated Friday, June 26th. The shares were sold at an average price of $98.25, for a total value of $383,862.75. Following the completion of the transaction, the director owned 67,364 shares of the company’s stock, 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. 0.60% of the stock is owned by insiders.
Hedge Funds Weigh In On Paychex
Several institutional investors and hedge funds have recently modified their holdings of the business. EFG International AG purchased a new stake in Paychex during the 2nd quarter worth approximately $1,494,000. Western Wealth Management LLC purchased a new stake in Paychex during the 1st quarter worth approximately $1,174,000. Oppenheimer Asset Management Inc. purchased a new stake in Paychex during the 2nd quarter worth approximately $7,296,000. Callan Family Office LLC purchased a new stake in Paychex during the 2nd quarter worth approximately $2,928,000. Finally, BlackRock Inc. purchased a new stake in Paychex during the 2nd quarter worth approximately $2,728,970,000. Hedge funds and other institutional investors own 83.47% of the company’s stock.
Key Headlines Impacting Paychex
Here are the key news stories impacting Paychex this week:
- Positive Sentiment: Q1 earnings exceeded expectations. Paychex reported adjusted EPS of $1.34, above the roughly $1.32–$1.33 consensus, while revenue rose 5.9% year over year to $1.63 billion, broadly matching estimates. Operating margin expanded to 38.0% from 35.2%, and adjusted EPS increased about 10%. Paychex Reports First Quarter Fiscal 2027 Results
- Positive Sentiment: PEO and Insurance Solutions remained a growth driver. Revenue in the segment increased 12% to $367.6 million, prompting Paychex to raise its fiscal 2027 segment growth outlook to 7%–8% from 6%–7%. The company also highlighted expanding artificial-intelligence capabilities, including its new WISE Hire recruiting solution. Paychex Introduces Agentic AI Recruiting Capabilities
- Positive Sentiment: Some analysts see value after the selloff. JPMorgan upgraded Paychex to Neutral and lifted its target to $115, while RBC maintained Sector Perform with a $130 target. Several other firms retained neutral or hold ratings, with targets generally above the recent trading level.
- Neutral Sentiment: Management maintained its broad fiscal outlook. Fiscal 2027 revenue growth guidance remains 5%–6%, with adjusted EPS growth of 7%–9% and EPS guidance of $5.896–$6.006. Second-quarter revenue guidance of approximately $1.6 billion was in line with expectations. Paychex Reaffirms Fiscal 2027 Guidance
- Negative Sentiment: The core business underwhelmed investors. Management Solutions, Paychex’s largest segment, grew only 4% to about $1.2 billion—below the pace implied by its 5%–6% full-year target. Investors appeared to want stronger evidence that integrations, cross-selling and AI investments would accelerate growth.
- Negative Sentiment: Profit-quality and cash-flow concerns added pressure. Articles noted weaker GAAP-to-adjusted earnings comparisons and operating cash flow of $413.5 million versus $424.1 million of dividends paid during the quarter, raising questions about dividend coverage. Multiple analysts consequently lowered price targets, including Stephens to $113, Stifel to $112, Jefferies to $110 and UBS to $115. Paychex Plunges After Earnings
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.
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