Barclays Maintains an 'Equalweight' on Paychex (PAYX); Good Q3, Progress Priced In

Barclays maintains an 'Equalweight' on Paychex (NASDAQ: PAYX), PT $30.

Barclays analyst says, "Last night, Paychex reported a $0.01 F3Q'11 EPS beat driven by slightly better Payroll revenue and cost controls. Management maintained F'11 guidance, but stated that F4Q'11 revenue would fall slightly below estimates. F3Q'11 revenue and EPS grew 4.6% and 5% y/y to $531M and $0.36, with EPS above the consensus of $0.35 and in line with our $0.36."

"Despite the slight 3Q beat, Paychex maintained F'11 guidance, and expects slightly weaker y/y revenue growth in 4Q'11 due to PEO fluctuations. Guidance remains for service revenue growth of 3%-5% y/y and EPS up 4%-6% y/y to $1.41-1.43. We are raising our FY'12 revenue estimate by ~1.5% due to the SurePayroll acquisition, but trimming FY'12 EPS by $0.02 due to slightly lower interest rate assumptions. We now estimate FY'11-'12 EPS of $1.42/$1.54, or y/y growth of 5%/9%, respectively."

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

Shares of Paychex closed at $32.24 yesterday.

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