Paychex (PAYX) PT Raised to $147 at TD Cowen

TD Cowen analyst Bryan Bergin raised the price target on Paychex (NASDAQ: PAYX) to $147.00 (from $146.00) while maintaining a Hold rating.

The analyst commented: "We anticipate PAYX's 3Q results to be in line to slightly above consensus & largely expect affirmation of FY25 guides (aside from float). Outperformance in shares for premium valuation, limited perceived upside to FY25 guides & long-biased positioning seem to limit upside catalysts and may yield modestly more downside risk. However, we don't anticipate an outsized reaction, leaving neutral stance.

We expect PAYX to relay a healthy message on selling season performance, supported by product & sales investments, and stable demand, with confidence on closing its proposed acquisition of PYCR by the end of June (likely sooner given HSR expiry). Bulls are apt to continue to view PAYX shares as a relative shelter amid market volatility, a quality longterm compounder, and have a favorable view of potential EPS accretion from the PYCR deal. Bears are likely to point to a lack of upside to FY25 guides (including downside risk to ex-float growth midpoint), full valuation, and concerns on accounting quality & FCF conversion trending lower post deal. Overall, we don't expect this print to be eventful for either side of the debate."

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