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Mizuho (NYSE:MFG) raised its price target on ADP (NASDAQ:ADP) to $332.00 from $321.00 on Friday, while maintaining an Outperform rating on the payroll processing company’s stock. The $125.7 billion market cap company, which boasts impressive gross profit margins of 48.3%, has maintained dividend payments for 52 consecutive years, according to InvestingPro data.
The price target increase followed Mizuho’s attendance at ADP’s investor day in New York City, where the company presented medium-term targets for both revenue and earnings per share that exceeded expectations.
Mizuho noted that ADP has "done a commendable job over the past several years improving product and execution," which has driven growth toward the high end of its previous targets.
The research firm expressed optimism about ADP’s future prospects as the company continues to introduce revamped products across market segments and leverages its human capital management industry-leading data and scale with tools like artificial intelligence to improve efficiencies.
Mizuho adjusted its medium-term estimates upward based on ADP’s strong outlook presented at the investor day event.
In other recent news, Automatic Data Processing Inc (ADP) reported strong fiscal third-quarter 2025 earnings, with earnings per share (EPS) reaching $3.06, surpassing analyst forecasts of $2.97. Revenue also exceeded expectations, coming in at $5.55 billion compared to the anticipated $5.49 billion. Despite these positive financial results, UBS has adjusted its outlook on ADP, lowering the stock price target to $315 from $323, while maintaining a Neutral rating due to valuation concerns and a revised growth outlook. ADP has also announced the pricing of a $1 billion senior notes offering at a 4.75% interest rate, maturing in 2032, with proceeds intended to refinance existing debt and for general corporate purposes.
Furthermore, the ADP National Employment Report highlighted an increase of 37,000 jobs in the U.S. private sector for May, with annual pay rising by 4.5%. ADP’s Professional Employer Organization (PEO) segment adjusted its mid-term growth forecast to 6-8%, down from the previous 10-12% forecast. The company remains committed to expanding its offerings, as demonstrated by the integration of the Lyric HCM Platform and Workforce Software (ETR:SOWGn), which is driving innovation and client acquisition.
These developments reflect ADP’s strategic focus on innovation and market expansion, with full-year guidance revised upward, expecting consolidated revenue growth at the high end of the 6-7% range and adjusted EPS growth of 8-9%. The company’s strategic moves, such as the acquisition of PEI in Mexico, aim to enhance its global payroll capabilities and support growth across the Latin America region.
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