Mizuho Securities’ analysts lifted their price target for ADP (NASDAQ:ADP) to $285.00 from the previous $255.00. Despite maintaining a Buy rating, the analysts highlighted ADP’s progress in narrowing the gap in organic growth compared to disruptive peers in the Human Capital Management (HCM) sector.
While these disruptive players still outpace ADP in growth, the difference in their organic growth rates has reached its lowest point in years, indicating enhanced execution on ADP’s part.
In terms of valuation, the analysts noted that ADP currently trades below its historical median price-to-earnings (P/E) ratio discount in comparison to similar companies in the business and information services field. However, analysts believe that ADP should command a smaller discount given its improved organic growth performance.