11:51 AM EDT, 03/27/2025 (MT Newswires) -- Paychex ( PAYX ) remains steady in a slightly lower-rate environment with stable conditions for small and medium-sized businesses, Morgan Stanley said Thursday in a note.

Company management indicated checks per client stayed flat, signaling a steady labor market, though employment levels softened briefly due to weather challenges and California wildfires, Morgan Stanley said.

Paychex ( PAYX ) on Wednesday reported higher-than-expected fiscal Q3 earnings, bolstered by revenue growth across its two main segments.

Business closures improved by double-digit percentages from a year earlier, Morgan Stanley said.

Growth was boosted by one-time factors in Q3, including tightened billings that improved pricing and slightly better year-end discounting compared with the prior fiscal year, Morgan Stanley said.

Morgan Stanley boosted its price target on Paychex ( PAYX ) stock to $142 from $137 and kept its equalweight rating.

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