Paychex Gets Buy Rating, Price Target Raised to $140 on AI and Paycor Synergies
PAYX•Citi upgraded Paychex to Buy, raising its price target from $99 to $140 and forecasting 5.0% organic growth in 2027 and 5.7% in 2028, driven by Paycor synergies and bookings momentum. The analyst cited AI-driven efficiency, diversification to under 40% payroll, 43.4% margins, $5.94 EPS and a 4.7% yield.
1. Rating Upgrade and Growth Forecasts
Citi upgraded Paychex to Buy from Neutral and raised its price target to $140 from $99, projecting organic revenue growth of 5.0% in fiscal 2027 and 5.7% in fiscal 2028, driven by momentum in bookings and synergies from the Paycor acquisition.
2. AI Tailwinds and Operational Efficiency
Analysts highlighted Paychex’s proprietary WISE platform, which leverages AI to enhance customer retention, automate workflows, lower operating costs and deepen engagement, positioning the company to capitalize on emerging AI-driven opportunities.
3. Diversification and Valuation
Payroll now accounts for less than 40% of Paychex’s revenue as it expands into HR outsourcing, insurance, retirement, compliance and advisory services; coupled with projected 43.4% operating margins, $5.94 adjusted EPS and a 4.7% dividend yield, the valuation is viewed as attractive at current multiples.
