UPDATE: Cowen Upgrades Paychex (PAYX) to Outperform

January 11, 2022 5:46 AM EST
Get Alerts PAYX Hot Sheet
Price: $116.36 +2.19%

Rating Summary:
    4 Buy, 14 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 4 | Down: 13 | New: 10
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(Updated - January 11, 2022 5:52 AM EST)

Cowen analyst Bryan C. Bergin upgraded Paychex (NASDAQ: PAYX) from Market Perform to Outperform with a price target of $145.00.

The analyst comments "We are upgrading shares of PAYX to Outperform and raising our PT to $145. PAYX is the right stock for right now. A more positive stance is supported by a strong HCM market backdrop, in conjunction with impressive product & sales execution by Paychex and stickier client retention is underappreciated and that we believe will drive revenue & earnings growth that's ~1.3x consensus over the medium term. In addition to attractive business fundamentals and yield, there are macro/market-driven benefits for PAYX shares as more investors seek vehicles for exposure to rising rates & the employment recovery, and increasingly favor high-quality large cap tech/services names with better stability & visibility, strong financials and robust profitability & FCF, vs. outsized growth multiples; we anticipate an ongoing lift for a quality compounder with scale. Downside is well-supported for this non-consensus stock (still ~85% Hold/Sell-rated). While the Omicron spike has occurred, data thus far reflects it is less severe than prior waves, and thus risks of lockdowns and meaningful economic pressure are lower as this moves from pandemic to endemic. Still, PAYX has conservatism in FY22 targets to account for the macro uncertainty, insulating downside risk in results and shares. We are above consensus, and we favor a continuation of likely outsized beat & raise performance that's apt to continue into FY23."

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 $126.58 yesterday.

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