A generic image of a stock chart
Markets

Paychex Downgraded to “Market Perform” at Wells Fargo (PAYX)

Payroll services provider Paychex, Inc. ( PAYX ) on Thursday caught a downgrade from analysts at Wells Fargo on a valuation call.

The firm said it cut its rating on PAYX from "Outperform" to "Market Perform" with a $31-$33 Valuation Range. That range implies a small upside to the stock's Wednesday closing price of $30.51.

A Wells Fargo analyst commented, "We believe PAYX is poised to benefit from the long-term trend of small businesses outsourcing increasing amounts of HR functions as well as the near-term cyclical upswing in the labor market. At the same time, we believe PAYX will remain among the most shareholder-friendly companies in our universe, returning a high level of its free cash flow in the form of dividends and engaging in a low-risk M&A strategy. That being said, we believe PAYX's premium valuation now reflects these positives."

Paychex shares fell 35 cents, or -1.2%, in premarket trading Thursday.

The Bottom Line

Shares of Paychex ( PAYX ) have a 4.06% dividend yield, based on last night's closing stock price of $30.51. The stock has technical support in the $27-$28 price area. If the shares can firm up, we see overhead resistance around the $32-$33 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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Created by Dividend.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PAYX

Other Topics

Stocks

Latest Markets Videos