ADP: Hold Rating Amid Stable Execution and Valuation Concerns

TD Cowen analyst Bryan Bergin maintained a Hold rating on Automatic Data Processing (ADP – Research Report) today and set a price target of $298.00.

Bryan Bergin has given his Hold rating due to a combination of factors including ADP’s solid execution and stable demand environment, which have led to mostly affirmed or raised fiscal year 2025 guidance. Despite these positive aspects, concerns about potential employment deterioration and the company’s fair valuation are likely to limit any significant upside in the stock price.
ADP’s performance is seen as a relative shelter amid market volatility, supported by consistent execution and a stable macroeconomic backdrop. However, the stock’s current valuation, which is at a modest premium to its five-year average, and the expectation of slightly lower future earnings per share estimates, contribute to a balanced view. The upcoming Investor Day in June is anticipated to provide further insights into medium-term targets and fiscal year 2026 guidance, which could influence future stock performance.

In another report released on April 23, RBC Capital also maintained a Hold rating on the stock with a $315.00 price target.