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Morgan Stanley started coverage on shares of Paychex (NASDAQ:PAYX) in a research note issued on Thursday, Analyst Ratings News reports. The firm set an “underweight” rating and a $39.00 price target on the stock. Morgan Stanley’s price target points to a potential downside of 10.30% from the company’s current price.

The analysts wrote, “The payroll processors’ business models are highly stable with an opportunity to grow off trends in HR outsourcing. However, dividend and buyback yields are at multi-year lows, and PAYX is at risk of being unable to grow as quickly as it did before. We prefer ADP (EW) over PAYX (UW).”

Paychex (NASDAQ:PAYX) traded down 1.56% during mid-day trading on Thursday, hitting $42.80. 791,632 shares of the company’s stock traded hands. Paychex has a 52-week low of $30.55 and a 52-week high of $44.40. The stock’s 50-day moving average is $42.69 and its 200-day moving average is $39.89. The company has a market cap of $15.630 billion and a price-to-earnings ratio of 27.52.

Paychex (NASDAQ:PAYX) last issued its quarterly earnings data on Tuesday, October 1st. The company reported $0.44 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.43 by $0.01. The company had revenue of $597.90 million for the quarter, compared to the consensus estimate of $605.56 million. During the same quarter last year, the company posted $0.42 earnings per share. Paychex’s revenue was up 5.1% compared to the same quarter last year. On average, analysts predict that Paychex will post $1.69 earnings per share for the current fiscal year.

Separately, analysts at Deutsche Bank reiterated a “hold” rating on shares of Paychex in a research note to investors on Wednesday, October 2nd. They now have a $39.00 price target on the stock, up previously from $35.00. Six investment analysts have rated the stock with a sell rating, eight have issued a hold rating and one has issued a buy rating to the company. Paychex has an average rating of “Hold” and an average target price of $34.96.

Paychex, Inc is a provider of payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses.

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