UPDATE: Citigroup Cuts PT to $29 on Paychex on Small Business Headwinds

Citigroup reiterated its Sell rating on Paychex (NASDAQ: PAYX) and cut its price target from $30.50 to $29. Citigroup commented, "Our recent checks on the small business environment imply that conditions have slightly worsened in recent months and may continue to do so going forward. In this environment, we believe PAYX will continue to struggle to drive new client growth and will likely trend toward to lower end of its organic revenue guidance. The company can pull levers to keep its EPS growth guidance (margins, buyback), but even then we are looking for only 6% net income growth for the 3rd consecutive year, which makes the 19x multiple expensive, in our view. Given the recent pullback in the broader market multiple and headwinds facing dividend-paying stocks, we are lowering our target to $29."Paychex closed at $31.74 on Tuesday.