Wire
Paychex's PEO Revenue Growth Expected to Reaccelerate in 2027, RBC Says
Paychex's (PAYX) Professional Employer Organization revenue growth is expected to soften in fiscal Q4 due to timing dynamics but should reaccelerate in 2027, driven by high single-digit Worksite Employee growth, RBC Capital Markets said Wednesday in a note.RBC expects 2027 revenue guidance of about 4.5% to 6% year-over-year, in line with RBC estimates and Street consensus of 5.6% and 5.4%, respectively.The brokerage expects Paychex to guide operating margin expansion of nearly 25 to 50 basis points year-over-year, assuming a more normalized year of margin expansion, according to the note.RBC said it anticipates aggressive buybacks with the $1 billion share repurchase authorization and dislocation in the stock price, delivering adjusted earnings per share growth guidance of 7% to 9%.The brokerage is modeling fiscal Q4 total revenue growth of nearly 12.4% year-over-year to $1.6 billion, broadly in line with consensus and guidance of 12%. Its adjusted EPS estimate is $1.31, in line with consensus, the brokerage said.RBC kept a sector perform rating on Paychex with a price target of $102.Price: $95.47, Change: $+1.05, Percent Change: +1.11%
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