03:10 PM EST, 12/16/2024 (MT Newswires) -- Paychex ( PAYX ) is likely to report fiscal Q2 results in line with estimates and reiterate its fiscal guidance when it releases its earnings, RBC Capital Markets said in a note emailed Monday.

The firm said it was modelling fiscal Q2 revenue of $1.31 billion, "modestly below" the consensus, and adjusted diluted earnings of $1.12 per share, in line with Wall Street forecast.

"We expect [Paychex ( PAYX )] to highlight stable revenue and client retention across all products," RBC wrote.

The firm said it expected fiscal Q2 revenue to be driven by the Management Solutions, PEO & Insurance Solutions, and Interest on Funds Held for Clients segments.

The firm also said it was monitoring the impact of hurricane season on the company as it had a relatively higher professional employer organization, or PEO, exposure in Florida.

Meanwhile, the company's latest product innovation, which include analytics and artificial intelligence integration, could drive "solid" retention rates and provide up-sell opportunities in the months to come, the firm noted.

RBC Capital Markets has a sector perform rating on the stock with a $148 price target.

Price: 141.52, Change: +0.53, Percent Change: +0.38