Paychex initiated with an Equal Weight at Stephens

Stephens analyst Charles Nabhan initiated coverage of Paychex (PAYX) with an Equal Weight rating and $135 price target The neutral view is based on the premium valuation in shares; the sub-optimal state of labor markets, and; areas of variability in the revenue model, which limits the potential for upward estimate revisions, the analyst tells investors in a research note. The firm is positive on the medium/long-term impact of Paycor and sees the premium valuation as appropriate, given industry leading margin/free cash flow profile, but views the risk/reward as balanced.