Barclays Maintains an 'Equalweight' on Paychex (PAYX); Sluggish Growth to Continue

Barclays maintains an 'Equalweight' on Paychex (NASDAQ: PAYX), PT $32.

Barclays analyst says, "Following on PAYX's F4Q'11 earnings conference call yesterday, we remain neutral on the stock maintaining our rating and price target. While fundamentals continue to improve moderately, low interest rates, weak new business creation, and a sluggish employment recovery continue to constrain near-term growth prospects."

"PAYX has an attractive business model with strong margins/ROIC/cash flow, an overcapitalized balance sheet, and a ~4.1% dividend yield that we believe warrants a premium valuation. But at a ~50% premium vs. the market and with limited near-term growth prospects, we find it fully valued at 20.9x/19.4x our CY'11-'12 EPS estimates."

For more ratings news on Paychex click here and for the rating history of Paychex click here.

Shares of Paychex closed at $30.57 yesterday.

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