UPDATE: Citi Downgrades Paychex (PAYX) to Neutral

Citi analyst Peter Christiansen downgraded Paychex (NASDAQ: PAYX) from Buy to Neutral with a price target of $125.00.

The analyst comments "PAYX’s strong recovery likely reflects the recent economic rebound. Now, with the U.S. economy recovering ~80% of jobs lost during the height of the pandemic, we believe that the stock’s multiple is beginning to peak and has largely priced in a full recovery, along with a number of idiosyncratic factors, including (i) resilient retention, (ii) steady small business sentiment/stable bankruptcy data, (iii) increasing complexity in HR, and (iv) new products. Going forward, we see limited near-term downside risk but expect the stock to track more closely to market performance along with “more moderate” earnings surprise uplift. Our revised $125 TP is slightly above our 30x-34x target multiple range (~65% premium to S&P 500) versus our $3.65 CY’22 EPS. Historically, PAYX has been best to buy early in an economic recovery. We think that the same rationale should be employed when gauging upside potential in the later stages of the recovery."

For an analyst ratings summary and ratings history on Paychex click here. For more ratings news on Paychex click here.

Shares of Paychex closed at $115.01 yesterday.

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