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Paychex Inc PAYX

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Morningstar’s Analysis

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Capital Allocation


Transferring Coverage of Paychex; Increasing FVE 26% to $106 and Maintaining Wide Moat Rating

Emma Williams Equity Analyst

Analyst Note

| Emma Williams |

We have raised our Paychex fair value estimate by 26%, to $106 per share, following a transfer of coverage. Despite an increasingly competitive operating environment, we are now more optimistic about Paychex's ability to win market share and take a greater share of client's wallet through high-margin add-on modules, supporting higher earnings than previously forecast.

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Company Profile

Business Description

Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 710,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance brokering.

911 Panorama Trail South
Rochester, NY, 14625-2396
T +1 585 385-6666
Sector Industrials
Industry Staffing & Employment Services
Most Recent Earnings Aug 31, 2021
Fiscal Year End May 31, 2021
Stock Type Cyclical
Employees 15,000