Paychex price target raised to $127 from $125 at Morgan Stanley

Morgan Stanley raised the firm’s price target on Paychex to $127 from $125 and keeps an Equal Weight rating on the shares. While there are some areas worth monitoring in terms of small business health including smaller deal sizes and slightly higher discounting, the environment for SMBs remains stable and better than bearish investors had anticipated, Morgan Stanley says. While an expected Employee Retention Tax Credit drag is driving near-term estimate reductions, constructive macro commentary, particularly on SMB closure rates, drove the intra-day share price recovery, the firm says.