Shares of Paychex (PAYX) - Get Paychex, Inc. Report are climbing Tuesday, up about 3.5% and within a stone's throw of new 52-week highs. The company beat on earnings per share and revenue expectations. Management also raised its full-year guidance for revenue and operating income.
The company reported a "magnificent" result and the guidance raise was important as well, TheStreet's Jim Cramer said on CNBC's "Stop Trading" segment.
Cramer also took to a recent research report from the analysts at Citi, who issued a sell rating on Sept. 29. The analyst argued that shares of Paychex remain overvalued and as a result, assigned a price target of $53. Sometimes sell ratings don't work out very well and this is a very good example of that, he reasoned.
Now Paychex is off to the races, he said, joking that perhaps the research report would now be best served as kindling for a fire. "It's got to be good for something," Cramer added.
Many thought Paychex would be a huge winner under the new White House administration. Higher interest rates, a stronger economy and an improved employment situation all benefit Paychex and its bottom line. However, shares have not traded the way many thought, nearly hitting a 52-week low in mid-August.
Shares are now up 7.5% on the year and will perhaps continue higher, as it now closes in on new annual highs. As many investors can tell, it's had a tight trading range over the past 12 months.
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At the time of publication, Cramer's Action Alerts PLUS had no position in any companies mentioned.