Deutsche Bank's FY3Q11 PAYX Expectations In-Line With Street

Deutsche Bank reports that it expects Paychex Inc.'s PAYX FY3Q11 revs to be $524.5M (+3% YoY) and an EPS of $0.35 (in-line w/ Street). “We model total services revs of +4% YoY, in-line w/ pace of growth seen in 1H, driven by +1% YoY increase in payroll revs (+3.5% checks/client) and +11% YoY growth in HRS,” Deutsche Bank writes. “We expect float income to decline 24% YoY based on client fund balance growth of +5% at a 1.3% yield (-31bps YoY). Our EBIT margin forecast of 37.5% (-50bps YoY, -360bps QoQ) assumes some 2H erosion related to ongoing sales/technology investments in biz.” Paychex closed Friday at $31.60.