Automatic Data Processing Q2 Revenue Rises 6.2% to $5.36 B; Stifel, BMO Cut Targets
Automatic Data Processing reported fiscal Q2 revenue of $5.36 billion, up 6.16% year-over-year and $21 million above forecasts, with EPS of $2.62 beating by $0.05. On February 9, Stifel Nicolaus cut its price target to $270 (from $280) while BMO lowered its target to $281, both retaining hold ratings.
1. Fiscal Q2 2026 Performance
Automatic Data Processing posted revenue of $5.36 billion, up 6.16% year-over-year and beating consensus by $21 million. The company reported adjusted EPS of $2.62, topping forecasts by $0.05, driven by strong business bookings growth and progress on strategic priorities.
2. Analyst Price Target Cuts
On February 9, Stifel Nicolaus cut its price target to $270 from $280 and maintained a Hold rating, citing an AI-related reassessment of growth drivers. On January 28, BMO Capital trimmed its target to $281 from $288 while keeping a Market Perform stance.
3. Valuation and Risk/Reward Profile
ADP trades at a 17% premium to the equal-weight S&P 500, the lowest level since the financial crisis compared to its historical 50–60% range. Analysts view the compressed premium as a compelling risk/reward opportunity given ADP’s consistent earnings growth.