ADP (ADP) PT Lowered to $280 at Stifel

Stifel analyst David Grossman lowered the price target on ADP (NASDAQ: ADP) to $280.00 (from $290.00) while maintaining a Hold rating.

The analyst commented, "F2Q revenue +5% organic cc in-line, EPS +11% (modest beat)F26 guidance (revenue +6% cc, EPS +9-10%) very modestly increased to reflect higher float/interest income (balances). Higher float/interest income and operating leverage enhances confidence in margin expansion +50-70bp y/y, plus share repurchases driving EPS growth above revenue growth.Bookings guidance maintained in wide-range (+4-7%) given F4Q seasonality (no quarterly reporting, but qualitative commentary sounded solid/in-line).PEO WSE growth reduced to low-end of guide (+2-3%) reflecting lower PEO PPC growth, softer bookings and anticipation of higher bankruptcies in F2H, though revenue growth remains elevated relative to peers NSP, TNET and in-line with PAYX.Stock closed relatively flat, trading at 26% premium to equal-weight S&P500 (EPS), meaningful discount to trend-line range of 50-60%.While we acknowledge muted hiring environment and perceived existential AI threats, stable HSD earnings growth, sustainable in most environments, plus 2.7% dividend offer attractive risk-reward."

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