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Investing.com - TD Cowen has reduced its price target on ADP (NASDAQ:ADP) to $263.00 from $294.00 while maintaining a Hold rating on the stock. The new target aligns closely with ADP’s current trading price of $263.65, with the stock now trading near its 52-week low of $260.24 and approximately 20% below its 52-week high of $329.93.
The adjustment follows ADP’s first-quarter fiscal 2026 earnings report, which prompted TD Cowen to revise its financial projections for the payroll and human resources company. Despite recent price pressure, ADP remains profitable with diluted earnings per share of $9.98 over the last twelve months.
TD Cowen increased its fiscal 2026 revenue estimate primarily due to improved float revenue expectations, while simultaneously reducing its outlook for the company’s Employer Services (ES) and Professional Employer Organization (PEO) segments in future years. ADP generated $20.56 billion in revenue over the last twelve months, representing 7.07% growth.
The revised forecast results in a slightly higher earnings per share (EPS) estimate for fiscal 2026, though the firm’s EPS projections for subsequent years have been modestly lowered.
TD Cowen’s new $263 price target is based on a 23.0x price-to-earnings multiple applied to calendar year 2026 estimated earnings.
In other recent news, Automatic Data Processing Inc. (ADP) reported impressive earnings results, surpassing analyst expectations. For the first quarter of fiscal 2026, ADP achieved an earnings per share (EPS) of $2.49, exceeding the forecasted $2.44. The company’s revenue also outperformed projections, totaling $5.2 billion compared to the expected $5.14 billion. Additionally, ADP reported a 7.1% revenue growth for a previous quarter, surpassing the Street’s expectations of 6.2%, and a 6.7% increase in earnings per share, above the forecasted 4.4%.
Despite these positive financial results, analysts have adjusted their price targets for ADP. Stifel has lowered its price target to $290 from $318, citing a flat employment outlook, while maintaining a Hold rating. Similarly, Jefferies decreased its price target to $245 from $315, also retaining a Hold rating on the stock. These recent developments provide investors with a comprehensive view of ADP’s current financial performance and market positioning.
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