ADP's Upbeat Q1 Results Earn Price Target Boost; Analyst Trims FIS Price Target On Dismal Q3

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  • Mizuho analyst Dan Dolev maintained Automatic Data Processing Inc ADP with a Buy and raised the price target from $257 to $276.
  • The company's Q1 results were strong.
  • The company slightly raised guidance as higher client fund interest drove the overall increase in the outlook, likely offset by higher FX headwinds. 
  • From a macro perspective, management sounded constructive. 
  • However, it highlighted some caution, like softer bookings growth in international business, and continued to watch the demand environment in global markets.
  • His revenue estimates increased slightly, but the rounded FY growth rate remains the same. 
  • Dolev maintained Fidelity National Information Services, Inc. FIS with a Buy and lowered the price target from $105 to $90.
  • FIS issued disappointing Q3 results and a subsequent profit warning
  • He remained constructive. Management flagged several issues as culprits for lowering its guide. The culprits included a slowing level of bank consolidation due to deteriorating credit markets, inflation, cost pressures impacting the expense base, and sales timing and execution due to continued elongation in more significant transactions.
  • He noted FIS's recent significant cost reductions within its labor force as a first step in the turnaround.
  • He lowered his 2023 expectations and price target.
  • Price Action: ADP shares traded higher by 0.72% at $264.48 on the last check Friday.
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