TD Cowen Reviews ADP as Segment Performance Diverges

Core Insights - Automatic Data Processing, Inc. (ADP) is recognized as one of the Dividend Growth Stocks: 25 Aristocrats [1] - TD Cowen has reduced its price target for ADP from $263 to $255 while maintaining a Hold rating, citing strong performance in Employer Services but caution due to weaker results in the PEO segment and broader sector pressures [2] - Despite a better-than-expected quarter, ADP's cautious outlook is influenced by mixed labor market conditions, with limited layoffs but noticeable hiring slowdowns [3][4] Financial Performance - ADP reported second-quarter revenue of $5.36 billion, slightly exceeding analyst expectations of $5.34 billion, with adjusted earnings of $2.62 per share, surpassing the consensus estimate of $2.57 [3] - The company has raised its full-year revenue growth forecast to approximately 6%, aligning with the upper end of its previous guidance [4] Business Segments - ADP operates through two main segments: Employer Services and Professional Employer Organization, providing cloud-based human capital management solutions [5] - The U.S. pay-per-control metric, indicating the number of employees on client payrolls, increased by 1% year-over-year, consistent with recent trends [4]