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Investing.com - Wolfe Research has lowered its price target on Paychex (NASDAQ:PAYX) to $130.00 from $140.00 while maintaining an Underperform rating on the stock. The company, currently valued at $45.62 billion, trades at a P/E ratio of 28.82. According to InvestingPro data, 5 analysts have recently revised their earnings expectations downward for the upcoming period.
The price target reduction follows Paychex’s fiscal first-quarter 2026 results, which prompted a 1.4% decline in the company’s shares on Tuesday, underperforming the S&P 500’s 0.4% gain.
Wolfe Research noted there was "some confusion on organic MS vs. Paycor trends" in the quarterly results, suggesting mixed performance metrics across business segments.
Despite the overall cautious outlook, the research firm highlighted that Paychex’s Professional Employer Organization (PEO) showed "healthy underlying fundamentals" even though revenue in this segment was softer than expected.
The firm’s decision to maintain its Underperform rating while reducing the price target by $10 indicates continued concerns about Paychex’s near-term growth prospects despite some positive aspects in its business performance.
In other recent news, Paychex Inc . reported its first-quarter fiscal year 2026 earnings, revealing an adjusted diluted earnings per share (EPS) of $1.22, slightly surpassing the forecast of $1.20. The company achieved a 17% increase in total revenue, reaching $1.54 billion, aligning with expectations. Despite these positive results, BMO Capital lowered its price target for Paychex to $140, maintaining a Market Perform rating. The firm cited uncertainties in the business, with guidance assuming improvement in the second half of fiscal year 2026. These developments come amid Paychex’s efforts to navigate business challenges while delivering on financial metrics. Investors are closely monitoring how the company addresses the identified uncertainties. The recent earnings call provided insights into the company’s financial health and future projections.
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