UPDATE: Citi Raising Price Target On Paychex Inc (PAYX)

Citi Investment Research is raising its price target on shares of Paychex Inc PAYX to $32 from $29.50, and has a Hold rating on shares. In a note to clients, Citi writes, "PAYX delivered a solid margin performance and in-line revenues, leading to a modest EPS beat vs. consensus. The forward outlook for FY11 was essentially maintained as well. The underlying operating metrics suggest improved pricing, checks per client and ancillary product sales, but continued weakness in client growth, PEO and interest income are limiting upside. The pace of small-business recovery remains muted. We are making modest tweaks to our model and our target price moves higher as we roll forward our valuation basis to FY12. We continue to have a preference for ADP over PAYX in the payroll space given similar growth at a modestly better valuation." Shares of PAYX gained 32 cents yesterday to close at $32.24, a gain of 1%.