Paychex (PAYX) remains steady in a slightly lower-rate environment with stable conditions for small and medium-sized businesses, Morgan Stanley said Thursday in a note.
Company management indicated checks per client stayed flat, signaling a steady labor market, though employment levels softened briefly due to weather challenges and California wildfires, Morgan Stanley said.
Paychex on Wednesday reported higher-than-expected fiscal Q3 earnings, bolstered by revenue growth across its two main segments.
Business closures improved by double-digit percentages from a year earlier, Morgan Stanley said.
Growth was boosted by one-time factors in Q3, including tightened billings that improved pricing and slightly better year-end discounting compared with the prior fiscal year, Morgan Stanley said.
Morgan Stanley boosted its price target on Paychex stock to $142 from $137 and kept its equalweight rating.
Price: 150.43, Change: +0.24, Percent Change: +0.16
