Shares of Automatic Data Processing Inc
The stock "lagged heavily" in 2023, underperforming the S&P500 by around 2,400 basis points, with the waning of tailwinds from employment and interest rates, according to BofA Securities.
The Automatic Data Processing Analyst: Jason Kupferberg upgraded the rating for Automatic Data Processing from Underperform to Neutral, while raising the price target from $217 to $243.
The Automatic Data Processing Thesis: While reporting the previous quarterly results, management had already indicated expectations of sluggish revenue growth and pressure on EBIT margins for the fiscal second quarter, Kupferberg said in the upgrade note.
"Strength in F1Q ES bookings and retention along with an incrementally better macro could drive a modest F24 guidance raise for these metrics," the analyst wrote. The PEO segment appears poised for an improvement in the back half of the year, he added.
Kupferberg further stated that he prefers networks to payroll processors, mentioning that Visa Inc
ADP Price Action: Shares of Automatic Data Processing had risen by 0.32% to $236.03 at the time of publication Wednesday.