UPDATE: Bank of America Reiterates Neutral Rating, Raises PT on Paychex on Encouraging Signs in Payroll Revenue Trends

In a report published Friday, Bank of America analyst Sara Gubins reiterated a Neutral rating on

, and raised the price target from $41.00 to $47.00. In the report, Bank of America noted, “Following a slightly better-than-forecast 2QF14 (Nov), we are increasing FY14E EPS by $0.01 to $1.70. Revenue for 2Q was 2% above our forecast, with faster growth in both payroll and HR services. For FY14, we now forecast 6.3% YoY Service revenue growth and 50bp of operating margin expansion on Service revenue. Our assumptions drive 9% net income growth compared to 8-9% guidance. On a recurring basis, we forecast 6% net income growth, compared to 6% recurring growth in FY13. Our FY14E and FY15E EPS are each up 1% to $1.70 and $1.84 (+8% YoY), respectively.” Paychex closed on Thursday at $44.90.