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Investing.com - RBC Capital has reiterated its Sector Perform rating and $150.00 price target on Paychex (NASDAQ:PAYX) ahead of the company’s first-quarter fiscal 2026 results. The company, currently trading at $139.54, maintains impressive gross profit margins of 72.35% and shows strong financial health with a profit score of 4.53/5 according to InvestingPro analysis.
The investment firm expects Paychex to deliver results modestly above consensus estimates and at the higher end of the company’s guidance range for the quarter.
Despite the anticipated positive quarterly performance, RBC believes Paychex will maintain its full-year fiscal 2026 guidance rather than raise it at this time.
RBC notes that Paychex’s outlook indicates improvement in organic growth throughout the year, driven by easier comparisons in its Professional Employer Organization (PEO) business and cross-sell synergies within Management Solutions.
The firm acknowledges potential headwinds from employment slowdowns and delayed tariff effects on small and medium-sized businesses, while highlighting Paychex’s progress in the partner channel with over 1,000 brokers signing up for Paycor (NASDAQ:PYCR)’s Partner+ program.
In other recent news, Paychex has announced a regular quarterly cash dividend of $1.08 per share, payable on August 29, 2025, to shareholders of record as of July 21, 2025. The company’s recent fourth-quarter results showed organic revenue growth of 3.3%, which fell short of the consensus estimate of 4.5%. Following these results, Stifel lowered its price target for Paychex to $152, citing revenue guidance concerns. Morgan Stanley (NYSE:MS) also adjusted its price target to $148, considering higher debt concerns but noted improved revenue and earnings projections for fiscal years 2026 and 2027 due to the Paycor acquisition. RBC Capital maintained a $165 price target, highlighting mixed growth trends and improved cost synergies from the Paycor integration. Meanwhile, BMO Capital initiated coverage on Paychex with a Market Perform rating and a $160 price target, viewing the Paycor acquisition as a strategic expansion. These developments reflect varied analyst perspectives on Paychex’s financial outlook and strategic initiatives.
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