ADP (ADP) PT Raised to $238 at Stifel

Stifel analyst David Grossman raised the price target on ADP (NASDAQ: ADP) to $238.00 (from $222.00) while maintaining a Hold rating.

The analyst commented, "We hosted ADP management meetings earlier this week. Our key takeaway was that despite the distortions created by the pandemic, guidance and longer-term targets are well thought out, consistent with historical trend and achievable, and our bottoms-up analysis yields FY23 estimates above consensus. ADP typically trades on bookings growth, which is currently distorted by the pandemic after normalizing for compares. However, we believe product/service enhancements and headcount adds to sales/implementation position the company to resume more normalized bookings growth in FY23. ADP is flattish relative to the S&P500 LTM, but a relative underperformer YTD. Its business model is relatively defensive, a beneficiary from rising rates and has only immaterial exposure to the Ukrainian conflict, which may suggest the market is discounting a cyclical peak as pandemic-related tailwinds abate. ADP is trading at 52% premium to the S&P versus ~60% pre-pandemic and a solid choice for those seeking defensive growth with yield."

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