UPDATE: Citigroup Reiterates On Paychex Following In-Line Fiscal 4Q14

In a report published Thursday, Citigroup analyst Ashwin Shirvaikar reiterated a Sell rating on

, but lowered the price target from $40.00 to $39.50. In the report, Citigroup noted, “PAYX reported roughly in-line results for its fiscal 4Q14. Its initial guide for FY15 was modestly better when excluding the PEO adjustment, but projected net income growth of 6%-8% is a challenging number to get excited about, especially with the stock trading at 22x CY15E. "While we acknowledge that management is doing a good job driving HRS growth, the demographic challenges at the bottom of their pyramid (i.e., selling ‘payroll' to new clients that are liable to use a cloud-based model) remain. We are modestly lowering our price target on PAYX to $39.50 from $40 to reflect the impact on our P/E multiple from a continued paltry client growth metric. We maintain a Sell rating on PAYX.” Paychex closed on Wednesday at $41.15.