RBC Capital analyst Ashish Sabadra reiterated a Sector Perform rating and {REMOVEPT} price target on Paychex (NASDAQ: PAYX).

The analyst commented: "PEO Momentum; Focus on Management Solution Inflection in FY27; We expect roughly in-line/modest 4Q26 beat and FY27 guidance in-line with estimates. Management Solutions should benefit from double-digit bookings growth, stable pricing increases, revenue synergies, and Paycor's upper-single-digit organic growth. PEO revenue growth is expected to soften in 4Q26 due to timing dynamics but should reaccelerate in FY27, driven by high single-digit WSE growth. Interest on Client Funds will face tougher year-over-year comparisons in 2Q27, though the higher-for-longer rate environment should provide ongoing tailwinds. Operating leverage and AI-driven efficiency gains, partially offset by incremental investments, should drive 25–50bps of margin expansion and 7–9% EPS growth in FY27."

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Shares of Paychex closed at $94.43 yesterday.