Mizuho raises ADP stock price target to $321, cites strong quarter

Mizuho (NYSE:MFG)’s forecast for ADP’s revenue growth and earnings per share (EPS) for fiscal year 2025 remains largely consistent with previous estimates. The firm is looking ahead to fiscal year 2027, with the price target increase reflecting a slightly higher multiple, acknowledging ADP’s consistent record of solid execution. Discover more valuable insights about ADP’s valuation and growth prospects through InvestingPro, which offers 12+ additional ProTips and comprehensive financial analysis. Discover more valuable insights about ADP’s valuation and growth prospects through InvestingPro, which offers 12+ additional ProTips and comprehensive financial analysis.

Analysts at Mizuho highlighted the management’s optimistic outlook on the macroeconomic environment, despite a cautious stance on new business formations as the second half of the fiscal year approaches. The firm’s analysts believe that ADP’s vigilance indicates a proactive approach to potential market shifts. With a market capitalization of $122.47 billion and a solid financial health score rated as "GOOD" by InvestingPro, ADP appears well-positioned to navigate market challenges.

The partnership between ADP and Fiserv (NYSE:FI), specifically the joint venture involving Clover & CashFlow Central, was praised by Mizuho. This collaboration is expected to cater to small and medium-sized businesses (SMBs) by providing integrated solutions for HR and payroll services, as well as accounts payable and receivable. Mizuho views this partnership as a significant strategic move due to the distribution strengths of both ADP and Fiserv, which could serve as a competitive edge.

Mizuho’s forecast for ADP’s revenue growth and earnings per share (EPS) for fiscal year 2025 remains largely consistent with previous estimates. The firm is looking ahead to fiscal year 2027, with the price target increase reflecting a slightly higher multiple, acknowledging ADP’s consistent record of solid execution.

The raised price target and sustained Outperform rating reflect Mizuho’s positive outlook on ADP’s future performance and strategic initiatives. The firm’s analysts see ADP’s recent actions as steps that reinforce its position in the market, particularly in services for SMBs.

In other recent news, Automatic Data Processing (NASDAQ:ADP) reported an impressive 7% increase in revenue and a 12% rise in earnings per share, surpassing market expectations. This strong performance is attributed to the successful acquisition of WorkForce Software (ETR:SOWGn) and solid results in the Employer Services and Professional Employer Organization segments. Analysts from Jefferies, BofA Securities, and TD Cowen have adjusted their price targets for ADP, with Jefferies and BofA Securities raising it to $305 and $315 respectively, while TD Cowen increased it to $290.

In other recent developments, ADP has seen changes in its executive team with Joseph DeSilva, currently President of Global Sales at ADP, stepping into the role of Executive Vice President, North America and Chief of Operations, replacing John C. Ayala. The U.S. private sector, as reported by the ADP® National Employment Report™, saw an increase of 122,000 jobs in December.

Lastly, ADP has announced a strategic partnership with Fiserv and has introduced ADP Lyric, a new global human capital management platform. These developments are shaping ADP’s business operations and future trajectory.

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