Deutsche Bank Raises Paychex Price Target


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Deutsche Bank raised its price target on Paychex, Inc. (NASDAQ: PAYX) Monday from $42 to $46 and maintained a Hold rating following the company's Q2 earnings release.

Analysts led by Bryan Keane felt the company is "well positioned for the key selling season."

“PAYX posted revs of $676m (9.7 percent Y/Y) and EPS of $0.47 roughly in line with our rev est. of $678m (10 percent Y/Y) and a penny ahead of our EPS est. Checks per payroll moderated to below 1 percent; however, the company is comfortable with the 1-3 percent client growth and pricing at the mid-point of the 2-4 percent range for the upcoming selling season,” according Keane.

The analyst noted indicated that Paychex "expects checks per client to moderate further in 2H15 given mix of client base, with a ~1pt moderation in checks per client growth equating to 25-50bps of impact to payroll service revenue. Payroll service growth of 3.9 percent was driven by increases in revenue per check and client base given pricing actions.”

The $46 price target was “based on 22x CY16E P/E, roughly in line with PAYX’s forward P/E over the last two years.”

Keane noted that “risks include better/ worse-than-expected new sales pick-ups, lower-than-expected yields on funds held for clients and new business starts.”

Paychex recently traded at $46.92, up 1.3 percent.


27% profits every 20 days?

This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


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Posted In: Analyst ColorPrice TargetAnalyst RatingsBryan KeaneDeutsche Bank