Automatic Data Processing (ADP) Message Board

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Non-Tech : Automatic Data Processing (ADP)

ADP 260.30

-0.5%

Oct 31 9:30 AM EST

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From: JakeStraw	1/24/2005 3:45:34 PM
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Automatic Data Is A 'Most Compelling' Growth Idea forbes.com 01.24.05, 2:25 PM ET Goldman Sachs maintained an "outperform" rating for Automatic Data Processing (nyse: ADP) and said the provider of transaction processing is one of the "most compelling growth ideas" in the information technology services sector. "ADP increasingly looks like the standout in a year where growth elsewhere looks mediocre," Goldman said. "With ADP now benefiting from rising interest rates and improving labor, the company is now returning to solid, double-digit growth in a period that other companies in tech and IT services are having a tougher time sustaining attractive growth." The company reported second-quarter earnings of 42 cents per share, a penny above Goldman's estimate; the research firm said ADP's expansion of add-on services and its sales force will keep it ahead of competitors. "ADP's December-quarter results marked the first time in three years that earnings-per-share growth returned to the double digits (to 11% year-over-year), and based on current trends, that rate should accelerate further into the low- to mid-teens," it said. "We're particularly encouraged that the investments seem to be paying off, and this puts ADP in its strongest competitive position in years enabling ADP to gain share." Goldman expects ADP shares to gain "roughly 15%, in line with estimated long-term earnings-per-share growth, and this could be boosted by price-to-earnings multiple expansion now that the company has returned to double digit earnings growth. The latter isn't necessary for our investment thesis, but could provide an additional boost to the shares

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