10:56 AM EDT, 08/20/2025 (MT Newswires) -- Paychex ( PAYX ) is expected to report fiscal Q1 results "modestly" above Wall Street forecasts and at the high end of the company's guidance range, RBC Capital Markets said in a report Wednesday.

RBC analysts said fiscal Q1 revenue is projected to grow about 17.1% year-over-year to $1.54 billion, matching consensus forecasts, while adjusted operating margin is estimated at 41%, slightly ahead of expectations. Adjusted earnings per share are forecast at $1.22, "relatively in-line" with the consensus estimate of $1.21, RBC said.

For fiscal 2026 ending May 31, the payroll services company said it expects revenue growth of 16.5% to 18.5%, adjusted earnings per share growth of 8.5% to 10.5% and an adjusted operating margin of about 43%.

The company's outlook suggests organic growth throughout the year, which is expected to be driven by "cross-sell synergies" from its Paycor HCM acquisition, stable pricing, and expansion in Management Solutions, though risks remain from a potential employment slowdown and pressure on small businesses, the report said.

Paychex ( PAYX ) said integration of Paycor is ahead of expectations, with cost synergy targets of about $90 million projected for fiscal 2026 and additional revenue synergies expected over time, according to the report.

RBC has a sector perform rating on the stock with a price target of 150.

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