11:37 AM EDT, 06/27/2024 (MT Newswires) -- Paychex's ( PAYX ) investors are probably questioning whether the fiscal 2025 outlook is sufficiently "de-risked," Morgan Stanley said Thursday in a report.

Caution persists regarding additional discounts in a "tougher marco" environment, Morgan Stanley said, "We're more focused on full-year outlook conservatism, particularly given the prospect for incremental PPC softness & incremental discounting to perhaps be used as a lever to solve recent deal closure challenges."

Concerns include shrinking deal sizes, discounting and volatile cross-sell opportunities, while "pays-per-control growth is expected to be broadly flat" in fiscal 2025, the report said.

Morgan Stanley "slightly" lowered estimates on the back of Q4 results and management's updated 2025 outlook."

Morgan Stanley cut its price target on Paychex ( PAYX ) stock to $122 from $125 and maintained its equalweight rating.

Paychex ( PAYX ) shares rose 0.3% in recent trading Thursday.

Price: 117.77, Change: +0.38, Percent Change: +0.32