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Posted by
Two Blokes Jun 18 -
Filed in
Stock
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We initiate Automatic Data Processing with a strong buy and $296.5 PT, seeing market skepticism as overdone versus ADP's resilient earnings and recurring revenue moat. ADP's structural float income and disciplined buybacks drive durable EPS growth, buffering macro/labor softness and justifying a premium valuation. We model muted client volume but see recurring revenue, float, and capital return levers offsetting the downside, supporting mid- to high-single-digit EPS growth.
