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

Automatic Data Processing, Inc. (NASDAQ:ADP) is included among the 13 Best NASDAQ Dividend Stocks to Buy Now.

On February 9, Stifel analyst David Grossman lowered his price recommendation on Automatic Data Processing, Inc. (NASDAQ:ADP) to $270 from $280. The analyst maintained a Hold rating on the shares. He noted that the stock is currently trading at a 17% premium to the equal-weight S&P 500. Even so, he described the valuation as offering a “compelling risk/reward,” given ADP’s stable business model and its ability to deliver consistent high-single to low-double digit growth.

During ADP’s fiscal Q2 2026 earnings call, President and CEO Maria Black said the company delivered solid results. Revenue increased 6%, while adjusted EBIT margin expanded by 80 basis points. Adjusted earnings per share rose 11%. She said the performance was supported by strength across international markets, US enterprise clients, compliance services, and both the small business and mid-market segments. Black also addressed client retention and satisfaction. She said the Employer Services retention rate came in as expected, despite a slight decline. At the same time, client satisfaction reached a record high, with the company reporting the strongest quarterly satisfaction levels in its history.

She also pointed to continued progress with ADP’s newer platforms. Workforce Now Next Gen gained traction among mid-market clients and reached a key milestone with its first sale to a customer with more than 1,000 employees. In the enterprise segment, Lyric continued to perform well, with more than 70% of new bookings and pipeline activity tied to new client wins.

Black also highlighted the impact of ADP’s acquisition of WorkForce Software in October 2024. The deal helped support the rollout of the ADP WorkForce Suite, and she said the company is already seeing early benefits. Several deals completed during the quarter included the WorkForce Suite as part of the overall solution.

Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management solutions. Its services help businesses manage payroll, workforce administration, and compliance. The company serves a wide range of clients, from small businesses with a single employee to large global enterprises.

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