Stifel Adjusts Automatic Data Processing (ADP) Price Target, Keeps Neutral Stance

Core Insights - Automatic Data Processing, Inc. (NASDAQ:ADP) is recognized as one of the 13 Best NASDAQ Dividend Stocks to Buy Now [1] - Stifel analyst David Grossman has lowered the price target for ADP to $270 from $280 while maintaining a Hold rating, citing a 17% premium over the S&P 500 but describing the valuation as offering a "compelling risk/reward" due to ADP's stable business model and consistent growth potential [2] - During fiscal Q2 2026 earnings, ADP reported a 6% increase in revenue, an 80 basis point expansion in adjusted EBIT margin, and an 11% rise in adjusted earnings per share, driven by strong performance in international markets and various client segments [3] Financial Performance - Revenue increased by 6% in fiscal Q2 2026 [3] - Adjusted EBIT margin expanded by 80 basis points [3] - Adjusted earnings per share rose by 11% [3] Client Retention and Satisfaction - Employer Services retention rate met expectations despite a slight decline [3] - Client satisfaction reached record highs, marking the strongest quarterly satisfaction levels in ADP's history [3] Product Development and Acquisitions - ADP's newer platforms, such as Workforce Now Next Gen, gained traction, achieving a key milestone with its first sale to a client with over 1,000 employees [4] - The enterprise segment's Lyric platform performed well, with over 70% of new bookings linked to new client acquisitions [4] - The acquisition of WorkForce Software in October 2024 is already yielding early benefits, supporting the rollout of the ADP WorkForce Suite [5]