Paychex (PAYX) Stock Price Target Upped at BMO Capital
NEW YORK (TheStreet) -- Paychex's (PAYX) - Get Report stock price target was lifted to $58 from $55 at BMO Capital Markets on Friday morning. The firm maintained its "market perform" rating on shares.
The higher price target comes after the Rochester, NY-based company posted higher-than-expected revenue for the 2016 fiscal fourth quarter yesterday.
Revenue increased 9% to $753.9 million year-over-year and exceeded analysts' expectations of $751.5 million. Earnings of 49 cents per diluted share were in line with analysts' estimates.
"The 'beat' in the quarter (at least vs. our estimate) was mostly revenue-driven as annual growth accelerated even when excluding the Advanced Partners acquisition impact (December 2015)," BMO wrote in an analyst note.
"As in prior quarters, much of the growth came from the Human Resource Services (HRS) segment with increases in the client base across all major services," the firm added.
Human resource services revenue climbed 14% to $311.2 million year-over-year during the period. Payroll services revenue rose 5% to $430.4 million.
"While Payroll Services growth was ahead of our expectations, management noted relatively flat checks per payroll, while price increases were offset somewhat by discounts," BMO said.
The company is a provider of payroll, HR and benefits outsourcing solutions for small and medium-sized businesses.
Shares of Paychex are declining 0.47% to $59.22 in pre-market trading on Friday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: PAYX