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• PAYX 0% Rate It

Payroll and human resources services provider Paychex, Inc. ( PAYX ) on Friday received some mixed commentary from analysts at Morgan Stanley.

The firm maintained its "Neutral" rating on PAYX but lifted its price target from $32 to $35. That new target suggests a small 5% upside to the stock's Thursday closing price of $33.37.

A Morgan Stanley analyst commented, "We are positive on the payroll processing sector but see less upside for PAYX due to (1) weaker cycle to cycle earnings improvement, (2) less-attractive capital allocation, and (3) slow recovery for SMB clients coming out of the downturn."

Continuing, "Our estimates are unchanged from our previous publishing but we increase our multiple from 19.5X as our organic growth analysis still shows nearly 20pp improvement over the previous employment cycle."

Paychex shares were mostly flat in premarket trading Friday.

The Bottom Line
Shares of Paychex ( PAYX ) have a 3.84% dividend yield, based on last night's closing stock price of $33.37. The stock has technical support in the $31-$32 price area. If the shares can firm up, we see overhead resistance around the $35-$37 price levels.

Paychex, Inc. ( PAYX ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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