Investing.com -- ADP (NASDAQ:ADP) stock fell 1.1% after the company hosted its 2025 Investor Day, where it announced mid-term financial objectives that largely met market expectations.
The payroll and human resources services provider outlined consolidated revenue growth targets of 6-7%, with Employer Services (ES) expected to grow at approximately 6% and Professional Employer Organization (PEO) services projected at 6-8%. The company also anticipates ES bookings growth of 6-7%.
ADP expects adjusted EBIT margin expansion of approximately 50-75 basis points annually, which should drive 8-10% YoY adjusted EBIT growth. The company is targeting adjusted EPS growth of 9-11%, including a 1% annual outstanding share reduction through repurchases.
The firm’s total shareholder return (TSR) objective is set at 11-13%, combining EPS growth with a 2% dividend yield. ADP’s float portfolio is assumed to have positive reinvestment rates on approximately $13 billion maturing in fiscal years 2026 and 2027.
TD Cowen analyst Bryan C. Bergin commented on the announcement: "We anticipate a fairly neutral reaction in shares given no meaningful surprise, pending management commentary."