Paychex post-earnings rally ‘looks overdone,’ says BofA

BofA raised the firm’s price target on Paychex (PAYX) to $132 from $120 and keeps an Underperform rating on the shares, but adds that the firm is “surprised by the magnitude” of the stock’s rally following fiscal Q3 results, which “looks overdone.” Possible explanations for the strength include positioning, as shares had lagged recently, incrementally positive updates on the Paycor HCM (PYCR) acquisition, and management seeming to suggest that elevated macro uncertainty is not impacting the business much, but PEO revenues for FY25 were guided down and the lack of preliminary FY26 revenue guidance was “modestly disappointing,” the analyst tells investors.